Korean wreck hunter backs off on claim of $13 billion of gold in Russian 'treasure ship'

Shinil Group President Choi Yong-seok speaks about the discovery of the Russian warship Dmitrii Donskoi during a press conference at the Sejong Center for the Performing Arts in downtown Seoul, Thursday. / Korea Times photo by Kim Joo-sung

By Park Si-soo

South Korean treasure hunter Shinil Group is "100 percent confident" it has discovered the Dmitrii Donskoi, a Russian warship that sank off Ulleung Island 113 years ago, but failed to present evidence the wreck is loaded with an enormous cargo of gold.

"At this point, we can't confirm if the wreck has gold inside," Shinil Group President Choi Yong-seok said at a press conference at the Sejong Center for the Performing Arts in downtown Seoul, Thursday. "But given that the various historic documents we secured suggested the existence of gold and there were several companies who spent big money on finding the ship in the past, we strongly believe the sunken ship still contains something of sufficient financial value."

Even if any gold is found, he said, its value would be much less than the alleged 150 trillion won ($133 billion). Shinil officials previously claimed 200 tons of gold worth 150 trillion won would likely still be aboard the wreck.

"The rumors regarding gold worth 150 trillion won started spreading from 1999," Choi said. "We found news articles and speculative documents in which public organizations had used 'treasure ship' when explaining about the Donskoi. So we took the description when promoting our project, without any fact-checking effort. I'm sorry for the irresponsible use of the description."

Experts had said it is unlikely that the 6,000-ton Donskoi, a heavily armored warship with more than 12 artillery pieces, 500 sailors and presumably 1,600 tons of coal, would have had room for 200 tons of gold. There were also questions about the gold's worth being estimated at $133 billion ― the Bank of Korea's 104 tons of gold reserves are valued at around $4.8 billion.

Shinil screened several close-up video clips of the wreck, in which "Donskoi" inscribed in the hull was clearly visible at one point. But any box or container that may contain gold was nowhere to be seen.

"I didn't see any steel boxes (that may contain gold)," said Jeffery L. Heaton, one of the two submersible pilots who captured the videos. "The ship was left broken into two parts, but the hull remained very much intact. I didn't see inside the hull. So it's possible something could there."

The other submersible pilot, Douglas J. Bishop, also said he didn't see anything like a gold container.

The alleged wreckage of the Dmitrii Donskoi and an undated photo of the Russian ship. / Courtesy of Shinil Group

From right, Shinil Group President Choi Yong-seok; Jin Gyo-joong, a former Navy officer who provided technical advice to the underwater expedition; Ha Deuk-bok, vice president of Marine Underwater Construction and chief of the underwater expedition team; Lee Woo-ryeol, vice president of JD Engineering; Allan, an adviser for the underwater expedition; Jeffery L. Heaton, a submersible pilot, and Douglas J. Bishop, another submersible pilot. / Yonhap

Shinil emphasized that it is the first finder of the Russian warship, so it's "righteous" for the company to claim the wreck's ownership.

"There are so many differences in shape and other details between what we found and the alleged Donskoi found in 2003 by the Korea Institute of Ocean Science and Technology (KIOST)," said Jin Gyo-joong, a former Navy officer who provided technical advice to the underwater expedition.

He compared underwater videos and photos of the alleged Donskoi recorded by Shinil and KIOST. The wreck featuring in Shinil's clips and KIOST's looked different in many ways.

Shinil denied Russian maritime experts' claims that the Donskoi still belongs to Russia.

"If it was torpedoed or went down because of an external factor, Russia still can make claim of its ownership," Choi said. "But, in fact, it was scuttled. Also, it was left abandoned there for over a century. So it makes very much sense that the wreck now belongs to Shinil."

Choi said there was a similar dispute between Spain and Colombia and a company in the same position as Shinil won the lawsuit.

He said the company is in talks with the Pohang Regional Office of Oceans and Fisheries over the wreck's salvage.

"The authority is expected to give us permission to raise it when we fulfill a legally required 10 percent deposit of the estimated value of the wreck, which it currently sees as scrap metal," Choi said. "If any gold is found, we will have to deposit another 10 percent of its estimated value."

He said retrieving the sunken ship would cost 30 billion won and the company has no problem funding it.

Meanwhile an official from South Korea's Financial Supervisory Service said Thursday that the regulator has started investigating allegations of stock market fraud surrounding Shinil and another local company, Jeil Steel.

Choi, whose investment company owns 50 percent of Shinil, recently agreed to become the majority shareholder of Jeil. After Shinil's initial announcement on the Russian ship, Jeil's stock price rose 30 percent on South Korea's KOSDAQ market last Tuesday and continued to rise the next morning, before Jeil said in a regulatory filing that it has "no relation to the treasure ship business." Jeil's stock price has since plummeted amid rising skepticism over the gold claims.

The FSS official, who did not want to be named, citing office rules, said the regulator was looking into various possibilities of deceptive practices, including whether investors were induced by a deliberate distribution of false information.

Choi denied any wrongdoing.