By Lee Hyo-sik
The prosecution has failed to secure an arrest warrant for a former ranking foreign ministry official suspected of participating in a stock price-rigging scheme involving a local firm developing a diamond mine in Cameroon.
The Seoul Central District Court refused to issue a warrant late Thursday night for former Ambassador for Resources Kim Eun-seok, 55, who prosecutors believe played a key role in inflating stock prices of KOSDAQ-listed CNK International by circulating a press release based on exaggerated data on the mine’s value in late 2010.
It is the second time investigators have failed to obtain an arrest warrant for key figures involved in the alleged share-price manipulation scam. Earlier, they sought the warrant for a former technical advisor at CNK surnamed Ahn but were unable to detain him.
“There isn’t enough evidence to charge Kim for collusion with others to manipulate CNK share prices. Also, there is no risk of him fleeing or destroying evidence,” said Judge Lee Jung-seok at the Seoul Central District Court.
The former foreign ministry official appeared at a courthouse in southern Seoul earlier on Thursday for the court hearing.
When asked by reporters about whether he admits to the charges against him, he denied any wrongdoing.
Kim said he worked hard as ambassador for resources to help the country secure energy resources overseas, stressing he was not engaged in any illicit activities.
But the prosecution said Kim was deeply involved in the preparation of the controversial press releases on the size of diamond reserves discovered by CNK in Cameroon.
In December 2010, the foreign ministry issued a press release that the mine in Yokadouma, 520 kilometers east of Cameroon’s capital Yaounde, had an estimated 420 million carats worth of diamonds, more than twice the annual global diamond production. CNK’s stock price skyrocketed immediately after the issuance of the release.
Investigators said Kim drew up the press releases even though he knew the size of the diamond reserves was greatly exaggerated.
He is also suspected of intentionally pressing foreign ministry officials to make deliberately-overstated data public to inflate CNK shares.
According to the prosecution, Kim told family members in January 2009 about CNK’s business in Cameroon.
Two of his brothers and several relatives bought and sold CNK shares over the past two years, realizing tens of millions of won in capital gains. Kim’s secretary was also found to have invested in CNK shares from August 2010 and earned 35 million won.