Fake it or take it, S. Korean company finds treasure ship with billions worth of gold

Company spots a sunken Russian warship with huge store of yellow metal

A South Korean company’s claim to have found a sunken Russian warship has triggered investor frenzy amid speculation the ship was carrying an enormous amount of gold when it sank 113 years ago. South Korea’s financial regulator subsequently issued a warning against possible investment losses.

The Seoul-based Shinil Group said that its divers discovered what a wreck it identified as the 6,200-ton Dmitrii Donskoi, which went down during the 1904-1905 Russo-Japanese war off an eastern Korean island.

The company speculated about 200 tonnes of gold bars and coins that are worth 150 trillion won ($132 billion, Dh484.7b appox) would still likely be aboard the ship.

Shinil released photos and videos taken by search submarines, which showed markings on the stern the company said was the ship’s name in Russian. It said it hoped to hoist the ship from its depth of more than 400 meters (0.25 miles) within months.

Other companies have made similar claims, but none has taken actual steps toward raising the wreck. One of them, Dong-Ah Construction, was accused of spreading false rumors to bump up its stock prices and later went bankrupt.

Shinil was founded on June 1 reportedly with about 100 million won ($87,800). The company is unlisted but its president recently agreed to acquire shares in a local company, Jeil Steel.

After Shinil’s announcement on the Russian ship, Jeil’s stock prices rose by 30 percent on South Korea’s KOSDAQ market on Tuesday. They continued their steep rise on Wednesday morning before Jeil in a regulatory filing clarified that Shinil’s president would be its second-largest shareholder, not the largest, if the deal goes through.

Jeil also said it has “no relation to the treasure ship business.” Jeil’s stock prices dropped more than 20 percent after Thursday’s trading.

South Korea’s Financial Supervisory Service said that it’s closely monitoring trade activity involving the shares of Jeil Steel. An agency official said that the regulator was watching out for possible deceptive practices involving the trade of Jeil shares, including inducements for investors through false information.

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