Seoul's financial regulator formally asked state prosecutors to launch a criminal probe into the accounting practices of Samsung BioLogics, the biopharmaceutical arm of Samsung Group, on Tuesday.
This comes after the Securities and Futures Commission suspended trading of Samsung BioLogics' shares on the benchmark KOSPI last week for intentionally breaching accounting standards.
The company is also subject to punitive examination for delisting.
The regulator argued Samsung BioLogics had inflated its value by nearly 4-billion U.S. dollars in 2015 by changing the method used to calculate its majority stake in Samsung Bioepis, its unlisted partner.
Samsung has denied any wrongdoing.