Daily Times

Police in Seoul requested an international arrest warrant for the founder of a Singapore-based firm Thursday 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 $130 billion.

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 last week, 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 Thursday, adding that the authorities had asked Interpol to issue a so-called red notice for Ryu.

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 last week, 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.

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.

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.

Published in Daily Times, August 3^rd 2018.