Samsung BioLogics Co. resumed trading on a strong rally Tuesday as South Korea’s main stock exchange operator decided not to delist the bio heavyweight whose stock had been suspended for weeks on alleged accounting misconduct.
Shares of the contract drugmaker under Samsung Group jumped 17.8 percent to close Tuesday at 394,000 won ($349) after Korea Exchange on Monday decided to keep the company on the main bourse, citing its outsize market presence and financial stability.
Trading of the sixth-largest stock on the Korean benchmark Kospi index had been suspended since Nov. 14 after the Financial Services Commission (FSC) found that the company had intentionally breached accounting rules by inflating its profits before going public in 2016.
Despite Samsung BioLogics’ shortcomings in accounting transparency, Korea Exchange concluded that the company showed little risk in terms of business continuity, pointing to its improved financial stability. Last year, the drugmaker raked in sales of 464.6 billion won and swung to a 66 billion won profit.
The news came as a relief to the more than 80,000 retail investors, who together own about a quarter of the company worth 22 trillion won prior to its suspension. Foreign investors hold about a 9 percent stake in the firm. The company’s two main shareholders are Samsung C&T Corp., Samsung Group’s de-facto holding company, and Samsung Electronics Co., which own 43.4 percent and 31.5 percent, respectively.
Market analysts expect the stock to make a sharp rebound to compensate for the price drop prior to the trade halt. Shares plunged more than 22 percent to 285,500 won on Nov. 12, its biggest one-day loss ever, before recovering to 334,500 won on the day of the FSC`s final decision. Experts say the rally could extend further as the company is projected to post even better earnings next year.
Samsung BioLogics welcomed the news and vowed to take action to improve its management transparency by strengthening its internal control system and accounting supervision within the first half of next year.
Separate from the Korea Exchange ruling, the drugmaker will proceed with its administrative suit against the financial authorities to clear its name. Late last month, the company filed a lawsuit seeking a court injunction to suspend the remedial orders, including correction of its accounting records and dismissal of its chief executive and chief financial officer.
By Moon Il-ho and Kim Hyo-jin
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