By Park Si-soo
The state watchdog has launched a sweeping investigation into a widening stock price-rigging scandal that involves a Cameroon diamond mine and Korea’s ranking diplomats.
The Board of Audit and Inspection (BAI) said Thursday it will conduct a preliminary investigation until next Wednesday. The BAI has made this move at the request of the National Assembly.
The board will check whether any officials earned illegal gains through the deal. If deemed necessary, based on the results of the preliminary probe, it will launch a full-scale investigation, the board said. The scandal was triggered by a press release from the Ministry of Foreign Affairs and Trade (MOFAT) on Dec. 17 last year. It came in celebration of a Korean firm’s winning the right to develop a diamond mine in Cameroon.
MOFAT said in the press release that the estimated amount of diamonds in the mine was nearly 2.5 times the actual diamond production worldwide in 2007. It touted the deal as a “model form of successful resource diplomacy,” initiated by the private sector and championed by the government.
The news made the headlines of many local papers, immediately sending the stock price of the mining firm, C&K Mining, to a record high.
But doubts have arisen over the deal after the Financial Supervisory Service launched an investigation in February amid rumors that some officials had earned illegal gains through the much-publicized contract.
The authorities found that the estimated diamond reserves had feeble scientific grounds. Adding to the controversy was that the family members of a former senior official at the Prime Minister’s Office and a geologist who conducted research on the estimated reserves had substantial stakes in the mining company. They have denied their involvement in the scandal.
The mining company said it will start to produce diamonds in full swing from later this year.