The stock trading suspension of Samsung BioLogics starting Thursday seemed to wrap up a chapter in the yearslong brawl over alleged accounting fraud, apparently with the defeat of the biotech company.

Market observers, however, remained divided on the impact that the case may have on the domestic stock market and the biopharmaceutical industry. Some optimistically suggested that the sanction may act as a turning point for the Samsung Group affiliate to end the prolonged uncertainty factor.

The downside risk is that the disincentive for the nation’s No. 2 pharmaceutical champion may further discourage investor sentiment, in light of a slowing economy.

“The resulting anxiety could trigger pessimism in the local stock market,” said Kim Hyeong-ryeol of Kyobo Securities.

He also pointed out that as a review on the length of trading suspension is still under way, uncertainties would prolong and possibly weigh down on the market.

Others, however, claimed that the latest sanction marked an end to monthslong uncertainty.

“The reasonable presumption would be that BioLogics’ trading suspension (due to its accounting fraud) would have little impact on the entire industry,” said Seon Min-jung, an analyst at Hana Financial Investment.

“In September, (authorities) came up with clear rules for biotech and pharmaceutical companies in general, so the accounting issues, which in the past often affected local bio firms, are now resolved.”

The final conclusion on the case, including the sanction, may even be seen as positive momentum, as it finally ended lingering uncertainty for the biopharmaceutical industry and Samsung BioLogics, the analyst added.

The Securities and Futures Commission of the Financial Services Commission on Wednesday announced its final judgment on Samsung BioLogics concerning its past practices of changing accounting methods.

“We have concluded that Samsung BioLogics arbitrarily interpreted the accounting rules and intentionally breached them in 2015,” SFC chief Kim Yong-beom said in a press briefing.

Imposing an 8 billion won ($7 million) penalty on the biotech firm and handing over the case to the prosecution, the regulator also recommended that its CEO, Kim Tae-han, be dismissed from his post.

Disputing the regulator’s judgment, Samsung BioLogics pledged to file an administrative lawsuit.

The key factor throughout the regulatory probe was whether the company had intentionally modified its system to gain favor in market listing. After years of losses, Samsung BioLogics suddenly reported a net profit of 1.9 trillion won in 2015, after changing the value calculating method for Samsung Bioepis, an affiliate established as a venture with the US-based Biogen Inc.

“(The trading suspension) could become a win-for-all game in the end,” said Jin Hong-koo, an analyst at Korea Investment & Securities.

“Financial regulators are now free from allegations that they were stretching rules (for the Samsung affiliate), and the company has the opportunity for a rebound, once its trading suspension is lifted, in which case investors may benefit as well.”

The stock price of Samsung BioLogics is currently frozen at Wednesday’s closing price of 334,500 won, up 6.7 percent from the previous session’s closing.

By Bae Hyun-jung (tellme@heraldcorp.com)