The Financial Supervisory Service (FSS) has begun supervising Celltrion Healthcare, a company ranked first in terms of the market capitalization in the KOSDAQ market.
According to a financial industry source on Dec. 11, the FSS has begun monitoring Celltrion Healthcare on suspicion of breaching the accounting standards. The largest shareholder of Celltrion Healthcare is Celltrion Chairman Seo Jeong-jin.
The FSS is investigating whether Celltrion Healthcare intentionally sold the right for sales of domestic products to its affiliate, Celltrion, and received 21.8 billion won and treated it "sales." The FSS is investigating whether it is an intentional account fraud or not.
Celltrion is in charge of producing and developing bio pharmaceuticals and Celltrion Healthcare is in charge of sales.
Celltrion sold the exclusive right for the sales of products to Celltrion Healthcare in the past, and Celltrion paid 21.8 billion won to Celltrion Healthcare by buying the right back in the second quarter of this year. And Celltrion Healthcare treated it sales.
The operating profit of Celltrion Healthcare for the second quarter of the year was reduced by 66.5 percent from the same period last year to 15.2 billion won, raising suspicions that the company barely avoided operating loss due to the amount paid by Celltrion.
In particular, some point out that it is inappropriate to treat the right for sale, which is an intangible asset, as sales.
On the suspicion of the transfer of sales rights, however, Celltrion Healthcare argued, "The company is generating revenue by using the exclusive right for sales in the entire world, and that the revenue from such activities can be judged as sales, in accordance with the international accounting standards."