Bonanza or fraud? Four questions over sunken Russian 'treasure ship'
An undated photo of the Russian battleship Dmitrii Donskoi. / Courtesy of the Asia-Pacific Center for Theoretical Physics.
By Park Si-soo
Is this really a sunken “treasure ship” with tons of gold? Or bait for financial fraud?
Many questions have floated to the surface since South Korea's treasure-hunting Shinil Group announced on Tuesday that it had discovered what it claims is the Dmitrii Donskoi, a Russian battleship that sank in 1905 off Ulleung Island allegedly with 14,000 metric tons of gold now worth a staggering 150 trillion won ($133.4 billion).
Shares of some companies said to be linked to the finder have skyrocketed even though they denied it. The Financial Supervisory Service has issued a warning to cool down the overheated race, clarifying that nothing has yet been confirmed.
Other claims against the treasure hunter include that the wreckage is not the Dmitrii Donskoi, the ship has no gold and Shinil's true intention is to sell its cryptocurrency.
The Seoul-based treasure hunter hit back, saying it will unveil “things that will surprise the world” at a press conference on July 25 or 26. The company said the exact date and location will be announced on its website (
https://donskoi.kr/main/main.php
).
Is the company trustworthy? The Korea Times has summarized rumors swirling around Shinil and its alleged booty.
The alleged wreckage of the Dmitrii Donskoi and an undated photo of the Russian ship. / Courtesy of Shinil Group
1. Loaded with gold worth 150 trillion won?
The underwater expedition to find the Dmitrii Donskoi has a long history. In 2000, South Korean builder Dong-Ah announced that it had discovered the ship. But it failed to raise it due to the opposition of major stakeholders who saw no value in the work. Dong-Ah's expedition license expired in 2014.
When the builder found the ship, Sergei Klimovsky, then head of scholarly research at the Central Naval Museum in St. Petersburg, debunked suggestions the vessel was carrying gold, in an interview with Bloomberg.
“There is no archival material or scientific evidence to support the idea that there is gold on the Dmitrii Donskoi,” he told Bloomberg. “This question of gold on Russian warships occasionally arises, but there is none, and the Koreans will be wasting their money.”
The New York Times also questioned the amount of gold allegedly loaded on board. In a Dec. 8, 2000, report, the newspaper said 14,000 metric tons of gold was an “impossible weight” for the Russian ship to carry. The Dmitrii Donskoi weighed an estimated 6,000 tons.
The Dmitrii Donskoi was said to be loaded with gold. / Courtesy of Shinil Group
2. Can Shinil take the gold?
Another critical question is about the gold's ownership, if there is any.
"We spotted things that look like treasure boxes, but we have not opened them yet," a Shinil official said. The company said it inspected the wreckage with two manned submarines Saturday. "We will open them up according to due process."
The Ministry of Oceans and Fisheries seems to be standing on the finder's side. It said Shinil can hoist the wreckage and take the gold, if any, after depositing 10 percent of the estimated value of what's buried with the ship.
Shinil says Russia could claim ownership of the wreck if the ship was torpedoed or went down because of an external factor. But documents show its sailors blew it up to avoid shameful surrender to Russia's Japanese foes during a war between the two countries. So the company believes the first finder has ownership.
The fact the ship has been abandoned for over 100 years is another factor giving the company an upper-hand in potential ownership talks, its officials said. They said under the related laws, if any valuable material is found, the company is allowed to take 80 percent after giving 20 percent to the government.
Shinil said it will clear administrative issues by the end of the month and start the retrieval process from September or October, at the latest.
According to The Daily Telegraph, the company said half of any treasure found would be handed over to the Russian government, while 10 percent of the remainder will be invested in tourism projects on Ulleung Island, including a museum dedicated to the vessel.
3. A scheme to sell cryptocurrency?
Shinil says the estimated value of gold coins and bars allegedly buried with the wreckage is 150 trillion won ($133.4 billion). If it's true, the company will have to deposit 15 trillion won with the government to win the right to bring the ship up to the surface.
The estimation will be decided in talks between Shinil and the Ministry of Oceans and Fisheries, which is in charge of managing sunken property in territorial waters.
To raise the deposit, Shinil recently issued its own cryptocurrency, Shinil Gold Coin. It also opened a crypto exchange whose headquarters is in Singapore.
But according to reports, the Singapore-based company is making money with business consulting and other services that have nothing to do with cryptocurrency, sparking rumors that Shinil is promoting its crypto business with the “treasure ship.”
4. Is Shinil the first finder?
Shinil Group claims it is the first finder of the Dmitrii Donskoi. But there are experts who say the Korea Institute of Ocean Science and Technology (KOIST) located the wreckage in 2003, but didn't salvage it because it found no value with it.
KOIST says the recently discovered wreckage is the same it found 15 years ago. But Shinil denies this.
Meanwhile, Dong-Ah Construction, which claims to have found the wreck in 2003, cut into the game on Thursday, claiming partial ownership of any gold.
“We located the ship for the first time in 2003 and we formally announced this,” the company said. “A discussion is needed to clarify which rights the first finder can claim. Shinil is misleading the public with a false claim that it's the first finder.”
The builder claimed the wreck has about 500 kilograms of gold worth 22 billion won.
“Shinil's claim of gold holdings is baseless,” a Dong-Ah official said.