Relatives of a senior Foreign Ministry official allegedly bought stocks of a Korean firm before the ministry announced in 2010 that it had won a lucrative right to develop a diamond mine in Cameroon, according to news reports. Kim Eun-seok, a senior diplomat in charge of energy and resource diplomacy, led the work to make the press release on the successful bid. The stock price of the firm, C&K Mining, jumped fivefold within 17 days of the ministry’s announcement on Dec.17. Kim’s brother and the brother’s wife allegedly purchased stocks worth more than 100 million won ($87,000), spawning speculation that they might have acted on insider tips. His other relatives are also purported to have bought some stocks of the firm. The Board of Audit and Inspection is currently finalizing the result of its audit concerning the allegations. It launched its inquiry after opposition parties asked it to investigate the allegations last September. A Foreign Ministry official said the ministry is waiting for the audit result. “It is expected to come out by the end of this month,” the official said on condition of anonymity. On Dec. 16, 2010, the African state offered the right to C&K Mining to develop a diamond mine in Yokadouma in southeastern Cameroon. Because of the potential economic benefits to Korea, Seoul government officials had helped the firm win the right. One day later, Seoul’s Foreign Ministry issued the press release, in which it said the estimated amounts of diamonds in the mine is 420 million carats. Some skeptics have doubted the estimated volume, arguing that it appears to be based on insufficient research. Seventeen days after the announcement, the stock price, which stood at 3,400 won per share, had risen to 18,000 won. As the stock price soared, some alleged it was a stock manipulation case involving government officials advertising the firm’s successful bid. Former minister for the Prime Minister’s Office Cho Joong-pyo and his family members also are reported to have purchased 260,000 newly-issued shares of C&K Mining ahead of the announcement on the successful bid. They are said to have gained more than 1 billion won in trading profits.
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Newsline: Diplomat’s relatives accused of insider trading