Fri, Jul 27, 2018 - Page 10 News List

S Korean firm retracts treasure claim

Reuters, SEOUL

A scale model of the Dmitrii Donskoi, a Russian armored cruiser, is displayed during a news conference in Seoul, South Korea, yesterday.

Photo: AFP

A South Korean company that claimed to have found the wreck of a Russian warship holding US$130 billion in gold yesterday said it has not verified the existence of any gold, while a financial watchdog said it was probing possible unlawful stock trading.

Shinil Marine last week said it had discovered the wreck of the Dmitrii Donskoi, a Russian armored cruiser sunk in 1905 after fighting Japanese warships off South Korea’s Ulleung Island, and that 150 trillion won (US$130 billion) of gold was onboard.

However, the company yesterday backtracked on those claims and apologized for having cited unverified news reports saying the ship held gold.

“The reports said the Donskoi held 200 tonnes of gold, but that would only be 10 trillion won at current value,” Shinil chief executive Choe Yong-seok said. “We apologize to the public for the irresponsible citation.”

Company officials showed video footage from a submersible vessel, including several shots that appeared to show the name “Donskoi” on the side of a ship.

Choe said submersible pilots had described several tightly lashed boxes within the ship that appeared to carry “meaningful items.”

Citing unspecified Russian records, the company said those items “must be gold bars or coins.”

However, they did not show any images of gold and said they could not confirm the existence of any of the metal onboard.

The South Korean Financial Supervisory Service (FSS) yesterday said it was investigating whether the company’s claims were part of any share price manipulation or other unlawful trade.

The FSS said that shares of Jeil Steel, in which both current and former heads of Shinil bought stakes earlier this month, had seen increased trading and rising prices since May, an official said.

The value of the shares jumped 139 percent after the “treasure ship” claim.

“The circumstances raise possible suspicions of stock price manipulation or unfair trade using undisclosed information,” said the official, who declined to be identified.

The share price fell on Wednesday to a near two-month low.

Jeil Steel said a week earlier it had “nothing to do with the treasure ship business,” but its stock rose as much as 19.2 percent yesterday on investor speculation.

Choe said Shinil held no shares in Jeil Steel and that the current and former heads had bought the shares as private individuals who had begun talks on their stakes last month.

FSS Governor Yoon Suk-heun on Wednesday said the watchdog was also investigating related “cryptocurrency issues.”

A Web site under Shinil Group’s name links the find to a “Donskoi International” cryptocurrency exchange that says it would hand out its virtual currency to anyone who signed up with the exchange.

Shinil Marine denied any connection with the cryptocurrency, which it said was run by a different company with the same name, and said it had changed its name.

A telephone number on the cryptocurrency exchange’s Web site led to the company until last week.

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