Opposition seeks House probe into diamond scandal
By Park Si-soo
The main opposition Democratic United Party (DUP) is seeking to launch a National Assembly investigation into the snowballing stock price rigging scandal, involving a ranking diplomat and a firm developing a diamond mine in Cameroon.
And the ruling Grand National Party (GNP) is apparently prepared to cooperate in the move.
“Simply put, this scandal is a combination of all the corrupt practices in the public sector,” said Kim Jin-pyo, the DUP floor leader, Thursday. “We will pursue a parliamentary inspection of the case to get rid of this deep-rooted corruption.”
Oh Jong-sik, a DUP spokesman, echoed the view, calling for a thorough investigation into the matter by the prosecution.
“While a handful of ranking officials were making tens of millions of won by manipulating stock prices, many individual investors in the company were in tears,” the spokesman said.
The scandal stems from a foreign ministry press release issued in December 2010 to promote its cooperation with CNK International to win the right to develop a diamond-rich mine in the African country. The ministry touted the deal as a “model form of resource diplomacy.” CNK’s stock price skyrocketed immediately after the issuance.
Yet, the business bonanza recently became the fodder of an unsavory scandal.
The state auditor suspects that Ambassador Kim Eun-seok pressed the foreign ministry to overestimate the mine’s value in the release. Kim is also suspected of having leaked information to his family members, relatives and friends before the public release of the news so that they could earn huge illegal gains by purchasing shares of the listed firm.
Some staff members at the Prime Minister’s Office, the Ministry of Knowledge Economy and other overseas resource-developing firms also allegedly benefited from the insider trading, according to media reports.
CNK Chairman Oh Deok-kyun is suspected of having earned a whopping 80.3 billion won ($72.9 million) through the alleged insider trading, according to the state financial watchdog.
The Board of Audit and Inspection has investigated the case since November and is expected to make public the results later this month. The ambassador has already been suspended temporarily over the case.
The prosecution is moving to open a separate investigation at the request of the Financial Supervisory Service and the Securities and Futures Commission.
The FSS filed a formal request for a probe into CNK with the Supreme Prosecutors’ Office Wednesday in the belief that the firm’s business bonanza in Cameroon was fraudulent.
The prosecution said it will call in key suspects for questioning early next week. It has also asked the Ministry of Justice to impose an overseas travel ban on them.
Key suspects to be questioned include Ambassador Kim; CNK Chairman Oh; Cho Joong-pyo, former vice foreign minister; and Park Young-joon, former vice minister of knowledge economy.
Cho and his family members are believed to have made nearly 1 billion won in illegal gains through the illegal deal. Park will be questioned over why he traveled to Cameroon in May 2010, as vice minister, to discuss the diamond deal with the country’s prime minister.