Korea’s financial regulator has launched an investigation into the unfair trading of stocks related to the Russian ‘treasure ship’ that recently grabbed headlines and attention in the stock market.
On July 25, a Financial Supervisory Service (FSS) official said, “As stocks related to the treasure ship have been behaving abnormally, we have started an investigation as this can open the door to stock price manipulation and illegal trading.”
The Seoul-based Shinil Group, which was established just over a month ago, announced on July 15 that it had discovered the wreck of the 6,200-ton Dmitrii Donskoi, a Russian cruiser which went down near the Korean islet of Ulleungdo 113 years ago in the 1904-1905 Russo-Japanese war.
In particular, it was reported that about 200 tons of gold bars and coins worth 150 trillion won ($133 billion) were still loaded on the ship, making shares in Jeil Steel, a KOSDAQ-listed company of which Shinil Group is a majority shareholder, to temporarily soar.
The share price of Jeil Steel had already risen sharply in mid-June, but hit the ceiling on July 17, soaring at 5,400 won the next day.
However, questions were raised as to whether the Donskoi actually did have a treasure aboard, given that Shinil Group was established on June 1 of this year and is known to have only 100 million won (approx. $88,800) in capital. Such speculations made the share price of Jeil Steel plunge to 2,235 won as of July 24.
The FSS is paying close attention to the surge in trading volume in Shinil Group shares since May, before the announcement that the company had found the alleged treasure ship.
Adding to the bizarre story, a cryptocurrency exchange website called the “Donskoi International Exchange” claiming to be linked to the Shinil Group was recently launched, promising to “share profits with the public” by providing “Shinil Gold Coins (SGCs) to all citizens at the membership signup,” and additional coins “to each person who has attracted additional members.”
A spokesperson for the group allegedly denounced the group’s link to the website. The FSS will also investigate any wrongdoings related treasure ship crypto exchange.
The watchdog said that it had monitored other stocks in which prices had rapidly increased but did not make any significant findings. Thus, it will focus its investigation on the Shinil Group and Jeil Steel.