Diplomat suspended for diamond scandal
By Park Si-soo
A high-ranking diplomat has been suspended from his role of exploring overseas natural resources for his alleged involvement in a stock price rigging scandal.
The Ministry of Foreign Affairs and Trade said Tuesday it had slapped the disciplinary measure on Kim Eun-seok, ambassador for energy and resources, last week, because of an ongoing investigation into the matter by law enforcement officials.
Kim has firmly denied any involvement. The investigation’s results are expected to be made public later this month.
The Board of Audit and Inspection and the prosecution have separately investigated the case after suspicions surfaced last year that Kim pushed the ministry to issue a press release in December 2010 that a Seoul-based listed firm had won the right to develop a diamond mine in Cameroon.
The release highlighted the visit of high-ranking officials to the African state to play a supporting role in striking the deal, touting it a “model form of successful resource diplomacy.”
Kim is suspected of leaking information to his family members, relatives and other diplomats before its release date so that they earned huge illegal gains by purchasing shares of the company involved, CNK International.
Kim’s younger brother and relatives reportedly bought 100 million won ($87,300) worth of the company’s stocks. Among other alleged beneficiaries are Cho Joong-pyo, a former official at the Prime Minister’s Office, and an executive of a nationwide TV station.
Cho and his family members are believed to have made nearly 1 billion won in illegal gains through the insider trading. The TV station executive was alleged to have received stocks worth 1.27 billion in early 2009, whose current value is now around 20 billion won.
CNK’s stock price skyrocketed immediately after the press release was issued on Dec. 17, 2010. CNK’s stock price closed Monday at 9,000 won ($7.85), up more than 400 percent from 2,100 won before the issuance.
Kim has vehemently denied the suspicion, saying “they decided to buy the shares on their own.”
The senior diplomat is also suspected of having cited exaggerated data in the release to highlight the deal’s significance.
The foreign ministry said in the release that an estimated 420 million carats worth of diamonds are buried in the mine in Yokadouma, 520 kilometers east of the African state’s capital Yaounde, citing two separate research reports of the area.
One was conducted between 1995 and 1997 by the United Nations Development Program (UNDP) and the other one in 2007 by Korea’s Chungnam National University. The reported amount is nearly 2.5 times the actual diamond production worldwide in 2007.
The authorities believe the estimation was based on wrong samples.
The foreign ministry said it will discipline Kim if his involvement in the scandal is confirmed by the investigation.
“We have never been tolerant in reprimanding violators of the code of conduct,” said Cho Byung-jae, a spokesman for the ministry, Tuesday. “This case will be equally treated according to the investigation result.”
The spokesman said no other diplomats are affected by the scandal.