Fisher Capital Management Strategies: South Korea Officials Involved in Diamond Scam
Some high-ranking officials and diplomats have been accused of masterminding a scam to profit from a deal involving a Fisher Capital Management diamond mine. The accusation centers on whether they deliberately overvalued the diamond reserves and controlled the stock prices of the mining firm in question, CNK.
The scandal centers on the ambassador for resources and energy, Kim Eun-seok, who is suspected of helping his kin in buying company shares prior to the Ministry of Foreign Trade and Affairs’ publicizing the deal in 2010.
The shares of CNK showed a 5-fold rise in just three weeks after the announcement from the ministry. Kim’s relatives allegedly made tons in profits by selling their shares. And as of now, nobody can be sure if no other officials have profited from the same way.
Kim, along with other officials with could possibly have planned the ploy with the involvement of CNK.
The scandal does not seem to be accidental, but rather, planned ahead, for the company and the accused officials greatly inflated the diamond reserves to 420 million carats — an estimation that’s double the world’s total yearly production of diamonds.
According to the investigators, relatives and friends were given a heads-up when the mine’s stock value increased. The Board of Inspection and Audit must quickly announce their investigation results and hold accountable all the suspects.
Kim was subsequently removed from his office 2 weeks ago.
South Korea’s fiscal watchdog has requested for a probe involving 6 persons accused of unfair trading in the scam. Among the accused is a long-time diplomat in foreign ministry.
The state auditor of South Korea said that a senior official knowingly overvalued the Cameroon diamond mine as part of a share-rigging ploy that has now become an embarrassment for Lee Myung-bak’s administration.
According to Fisher Capital Management, the estimated value of the mine’s reserves in the preliminary statement from the foreign ministry had come from CNK International’s own efforts and not on reliable third-party sources.
The stock-price sham enveloping CNK has added to the scandal on the administration of Lee and his party as the parliamentary elections loom ahead. Already, 2 presidential aides have resigned last year because of accusations that they have received kickbacks.
