Diplomat’s stock scandal spreads to other agencies

By Korea Herald
  • Published : Jan 18, 2012 - 17:38
  • Updated : Jan 19, 2012 - 08:54

Relative of public firm’s employee involved in diamond development case

A relative of a public corporation employee is suspected of having purchased stocks of a local firm based on insider information, before the government announced its successful bid to develop a diamond mine in Cameroon in 2010.

The suspicion comes as public antipathy deepens over the allegations that some relatives of Kim Eun-seok, a suspended senior diplomat in charge of energy and resource diplomacy, used insider tips to purchase firm stocks, C&K Mining.

Less than a month after the Foreign Ministry issued a press release on the successful bid, the firm’s stock price jumped more than five-fold, spawning speculation that the press announcement may have sparked the surge in the stock value.

Authorities have expanded their probe to other senior public servants including those in the Prime Minister’s Office. They have reportedly secured some circumstantial evidence implicating more officials.
(Yonhap News)

Critics have berated the government for “moral laxity,” calling on it to tighten discipline in officialdom.

Korea Resources Corp. said it would take “stern action” should employee misdeeds be confirmed.

“Regarding the C&K Mining stock dealings, one of our employees was found to have been involved after the state auditors’ investigation last October. That employee was part of the government ‘resource diplomacy delegation’ that was sent to Africa in 2010,” KRC said in a statement.

“We have so far actively cooperated with the state auditors’ investigation. Should any misdeed be confirmed, we will take stern measures accordingly.”

KRC President Kim Shin-jong said in a media interview that it would not be a matter concerning the entire corporation, but a “private” misdeed.

“This is not a case that took place today. We have heard of such rumors since a long time ago,” he said. “(It is) a private matter should the alleged misdeed be confirmed.”

Independent lawmaker Jeong Tae-keun claimed that there appears to be a move by someone in high authority to cover up the scandal.

“I raised questions over the case last August. As the state auditors’ investigation result is due by the end of this month, people now say they would consider filing a complaint with the prosecution over it,” he said in a radio interview.

“There is someone exercising his power over it. The prosecution is said to have started its unofficial inquiry last year, and then the result should have come earlier. People cannot trust them when the authorities move in an unfair way.”

On Dec. 16, 2010, Cameroon offered the rights to C&K Mining to develop the diamond mine in Yokadouma in the southeast of the African country. Because of the potential economic benefits to Korea, Seoul government officials had helped the firm win the deal.

One day later, Seoul’s Foreign Ministry issued the press release, in which it said the mine held an estimated 420 million carats in diamonds. Critics say the estimate appears to have been exaggerated, arguing that it was based on insufficient research.

Less than a month after the announcement, the stock price, which had stood at around 3,000 won ($2.63) per share, had risen to 16,100 won.

Former minister for the Prime Minister’s Office Cho Joong-pyo and his family members also are reported to have been offered the rights to 250,000 newly-issued shares of C&K Mining ahead of the announcement on the successful bid. They are said to have gained more than 500 million won in trading profits.

By Song Sang-ho (