CNK head in Cameroon pressured to return home for questioning
Prosecutors raided the Ministry of Foreign Affairs and Trade on Monday for evidence that its disgraced energy envoy was involved in stock-rigging.
Seoul Central District Prosecutors’ Office dispatched investigators to confiscate computer hard disks and documents at the office of Kim Eun-seok, who was a senior diplomat in charge of energy and resource diplomacy. It was the first time prosecutors raided the Foreign Ministry. Kim’s home, the energy, climate change and environment division and the Africa division of the ministry were also searched.
Last week, the Board of Audit and Inspection said Kim led the ministry to publish a press release on Dec. 17, 2010 that included an overblown estimate of the diamond reserves at a mine in Yokadouma in Cameroon.
After the press release, which put the reserves at 420 million carats, the company’s stock price shot up to 16,100 won ($14.40) per share in 16 trading days from about 3,000 won.
Although Kim knew that the actual diamond reserves were only one seventeenth of the initial estimate, he still led the Foreign Ministry to publish the press release, the BAI said.
Prosecutors started probing CNK International after the financial authorities filed a complaint against the firm last Wednesday.
CNK International president Oh Deok-gyun and Cho Joong-pyo, formerly a vice foreign minister and minister in the Prime Minister’s Office, among others, are suspected of insider trading in connection with the scandal. Park Young-june, a former vice economic minister, is also under suspicion of playing a major role in the insider trading scheme.
Foreign Minister Kim Sung-hwan leaves the ministry in Seoul on Monday after prosecutors raided the building for evidence that the ministry’s energy envoy was involved in artificially boosting the stock prices of a Korean diamond development firm in Cameroon. (Lee Sang-sub/The Korea Herald)
Kim talked about CNK’s diamond mining project with his siblings in January 2009, according to the prosecution and the BAI.
His two younger siblings had purchased more than 80,000 shares in CNK by the end of January 2011 and gained more than 20 million won ($17,770) in profits after selling some of them, they said.
An aide to Kim allegedly started buying CNK stocks in August 2010 and made 35 million won in profits by selling them later. The official also used the ministry’s phone 1,585 times to trade stocks through a securities firm, the BAI said.
The prosecution said it is pressuring Oh, who left for Cameroon in October, to return to Korea for further investigation. Prosecutors are reportedly preparing to summon the suspects for questioning as early as this week.
Meanwhile, independent lawmaker Jeong Tae-keun told a radio program on Monday that the BAI should investigate the Korea International Cooperation Agency, affiliated with the Foreign Ministry, because KOICA’s aid to Cameroon quadrupled to 2 billion won in 2010 from 500 million won in 2009.
“The steep increase in KOICA’s aid to Cameroon may have been linked to CNK International’s winning of its diamond mining rights,” he said.
By Kim Yoon-mi (firstname.lastname@example.org