Stephen Haddrill to leave U.K. FRC next year
Chief Executive of the United Kingdom’s Financial Reporting Council (FRC) Stephen Haddrill plans to step down from his post. Haddrill, who has been with the FRC for close to a decade, said he will leave the council in late 2019. His announcement comes amid mounting criticism faced by the audit watchdog for the spate of corporate collapses during its watch, such as construction group Carillion and British department store BHS. His exit date will depend on a review led by Chairman of Legal and General plc Sir John Kingman, which will examine the effectiveness of the FRC as a regulator. Haddrill said, “I am incredibly proud to have led the FRC for nearly nine years. I remain fully committed to taking forward the FRC’s important programmes on audit reform, investor stewardship, corporate reporting and preparing the FRC for [the U.K.’s] EU exit.”
Samsung faces accounting concerns
Samsung BioLogics, parent company of biopharmaceutical company Samsung Bioepis, has been fined US$7 million by South Korea’s financial regulatory body. The Securities and Futures Commission alleged that the company used fraudulent accounting methods in 2015 to inflate the value of Bioepis ahead of its initial public offering in 2016, which eventually raised US$2 billion. Trading has since been suspended, and the commission has recommended that the company should be delisted from the Korean stock exchange. In a letter to shareholders, the company apologized but denied any wrongdoing, claiming that their accounting practices were acceptable, having sought advice from multiple accounting firms. They now plan to file a lawsuit to “clearly prove the legality of Samsung BioLogics’ actions.”
U.S. government investigates Snap’s IPO
Snap Inc., Snapchat’s parent company, is being investigated for allegedly manipulating its US$3.4 billion initial public offering. The company announced on 14 November it had received a subpoena from the United States Department of Justice and the Securities and Exchange Commission requesting information relating to its IPO in March 2017. The class action suit accuses the company of making “materially false and misleading statements” and for dismissing an employee who questioned their metrics after three weeks on the job. Snap denies the claims in a statement, saying: “We continue to believe the class action’s claims are meritless and our IPO disclosures were accurate and complete. We intend to continue to cooperate with these regulators on their subpoenas and requests for information.”
Nissan chairman arrested for tax evasion
Carlos Ghosn, the 64-year-old chairman of Japanese multinational automobile manufacturer Nissan, was arrested on 19 November on charges of falsely reporting his earnings. He was dismissed from the company four days after his arrest. Prosecutors are accusing Ghosn of under-reporting the 5 billion yen (HK$343 million) he earned at Nissan over five years from 2010. He is also accused of using 2.6 billion yen in company money to buy several homes and is suspected of shifting some 1.7 billion yen (HK$117 million) of losses from personal investments to the automaker in 2008. Both Ghosn and Greg Kelly, the Nissan executive accused of consipiring with him, deny the claims.