False testimony charges to be filed in diamond scandal

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False testimony charges to be filed in diamond scandal

A National Assembly committee said yesterday it is considering bringing to the prosecution a senior diplomat and the head of a company who are at the heart of a swirling diamond mine scandal, at the request of a lawmaker who has had his eye on the allegedly illegal stock trading scheme.

Representative Jeong Tae-keun asked the National Assembly’s Knowledge Economy Committee, of which he is a member, to file charges against Ambassador Kim Eun-seok and Oh Deok-gyun, chairman of CNK International for false testimony at the parliament.

“We will look over the parliamentary records and will take measures with consent from the representatives of the ruling and opposition parties if there turns out to be false testimony,” said Kim Young-hwan, chairman of the committee.

The Financial Services Commission said on Wednesday that it would file charges against Oh for unfair stock trading, accusing him of making 80.3 billion won ($70.6 million) worth of undue profit by artificially inflating the company’s value using the shady diamond deal in Cameroon.

Kim is suspected of intentionally promoting the deal by producing a press release on Dec. 17, 2010 that said 420 million carats of diamonds, or 2.5 times the global annual diamond production, are estimated to be buried in Cameroon mines to be developed by the company. The financial authorities said it would not file separate charges against Kim as he is under investigation by the Board of Audit and Inspection.

Jeong claimed that Kim had said during parliamentary scrutiny over the case last year that he used the official data provided by the Cameroon government. The press release on Dec. 17, 2010 cited the United Nations Development Program and Chungnam National University in Korea as sources of the data.

The financial authorities said on Wednesday that the company used the names of the UNDP and the local university although no such data came from the two institutions.

The financial authorities said the company had acquired the estimate of only 25 million carats of diamonds in its own research, but kept it under wraps.

Jeong suspects Kim knew the data was wrong when he drafted the press release. Kim’s younger brother and the brother’s wife purchased over 100 million won worth of stocks in the company before the press release came out, the financial authorities said on Wednesday.

Jeong said that Oh also gave false testimony during the parliamentary audit by saying the diamond mines would produce a substantial outcome soon and pledging that he would not sell a single stock of the company.

The financial authorities said Oh sold millions of shares of the company and made around 80.3 billion won worth of undue profits. The company’s stock values jumped 4.7 times only in 16 trading days after the press release came out.

The suspicion of foul play behind the appreciation of the company’s value was raised during the parliamentary audit in August last year and the Board of Audit and Inspection launched the investigation two months later. It is yet to announce the result.

On an MBC radio program yesterday, Jeong battered the government for dragging its feet in investigating the case. He suspected there was a political power that impeded the investigative authorities from completing the investigation into the case.

“The prosecution has also to look at this,” he said.

The Foreign Ministry requested the audit authorities investigate the case on Aug. 23 last year but the board launched the preliminary investigation only two months later, on Oct. 23-26.

The board completed its investigation on Dec. 16 and was expected to announce it at a weekly audit committee yesterday. But, it said on Wednesday that it would delay its announcement until Jan. 26 at the next weekly committee meeting.

The Foreign Ministry officials are complaining that the delay is only reinforcing negative publicity of the ministry as allegations about wider involvement from the ministry’s officials are coming out one after another.

“(The board) is conducting a political audit on it, delaying its announcement until it sees fit,” an official of the Ministry of Foreign Affairs and Trade told the JoongAng Ilbo.

By Moon Gwang-lip [joe@joongang.co.kr]
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