Police probe South Korean group over ‘sunken treasure’ claim

POLICE have raided the offices of a South Korean company and banned its CEO from leaving the country after claims it had discovered $A175 billion in gold from a sunken Russian warship.

POLICE in Seoul have raided the offices of a South Korean company which claims to have found a treasure-laden shipwreck.

South Korean police also requested an international arrest warrant for the founder of a Singapore-based firm after launching an investigation into the company and a South Korean start-up over false claims of discovering a long-lost Russian “treasure ship”.

Seoul-based Shinil Group announced last month that it had discovered the wreckage of imperial vessel Dmitri Donskoi off South Korea’s east coast, saying the ship was believed to contain gold bullion and coins worth $US130 billion (A$175 billion).

Part of the Dmitrii Donskoi wreck, which is rumoured to have been carrying a cargo of gold. Picture: Shinil Group

But since then, the firm has faced questions about whether the announcement was aimed at artificially boosting share prices, or luring investors into buying a virtual currency which a Singaporean company — also named Shinil Group — had recently started to issue.

Financial regulators announced a probe into the South Korean firm, while police launched a criminal investigation, saying that the founder of the Singaporean Shinil Group, surnamed Ryu, was also wanted in connection with fraud allegations dating back to 2014.

“He is the key figure in the suspected treasure ship scam,” a police official told AFP, adding that the authorities had asked Interpol to issue a so-called red notice for Ryu.

RELATED: Doubts raised over Russian treasure ship with $175 billion in gold

A scale model of Imperial Russian naval cruiser the Dmitrii Donskoi at a press conference in Seoul last week. Picture: AFP

A red notice is a request to locate and provisionally arrest a person with a view to extradition.

Police have been hunting for Ryu since 2014, when he fled the country during a separate investigation.

“We are asking police in any relevant country to help locate and repatriate him at the earliest possible date”, the official said, adding that South Korean authorities believed Ryu was now living in Vietnam.

Following news of the financial probe, the CEO of the South Korean Shinil Group apologised, explaining that the firm may have gone overboard on the claims and saying that speculation on the value of treasure inside the ship was based on news reports and unverified documents.

The identity of the Dmitrii Donskoi appears to have been verified by its surviving Russian nameplate. Picture: Shinil Group

Choi Yong-seok also insisted Shinil Group in Singapore had nothing to do with Shinil Group in South Korea, although the two companies’ founders are siblings, and the Singapore firm has been selling virtual coins, reportedly with a promise of handsome returns in case treasure is salvaged from the ship.

The claims also caused share prices of Jeil Steel — a company in which the founder of the South Korean Shinil Group had acquired a large stake — to skyrocket initially. But Choi said the two firms were not associated with each other.

Choi Yong-seok (2nd L), CEO of Shinil Group, looks at a video footage taken by a submersible of the wreck, with the word "Donskoi" visible on the hull. Picture: AFP

Observers say in 2003 another firm sparked a stock bubble by announcing the discovery of the Donskoi, which sank in a 1905 naval battle against Japan.

Experts have said imperial Russia would have no reason to load vast treasure on a ship that was going into battle and have also noted that there was a safer land route to Vladivostok, the treasure’s supposed final destination.

Choi Yong-seok, CEO of Shinil Group, alleged the boat was carrying A$175 billion in gold. Picture: AFP