Experts sceptical about claims made by company that says it has found the Dmitrii Donskoi, which went down during 1904-1905 Russo-Japanese war
A South Korean companys claim to have found a sunken Russian warship has triggered a frenzy amid speculation the ship was carrying an enormous amount of gold when it sank 113 years ago.
The Seoul-based Shinil Group said its divers discovered a wreck it identified as the 6,200-ton Dmitrii Donskoi, which went down during the 1904-1905 Russo-Japanese war off an eastern Korean island. The company speculated that 200 tons of gold bars and coins ) would probably still be aboard the ship, and claimed that this would be worth 150tn won ($132bn). However, this appears to be a huge overvaluation: the Bank of Koreas 104 tons of gold reserves are valued at around $4.8 billion.
Shinil released photos and videos taken by search submarines, which showed markings on the stern the company said was the ships name in Russian. It said it hoped to hoist the ship from its depth of around 400 metres within months.
Other companies have made similar claims, but none has taken steps toward raising the wreck. One of them, Dong-Ah Construction, was accused of spreading false rumours to bump up its stock prices and later went bankrupt.
Shinil is unlisted but its president recently agreed to acquire shares in a local company, Jeil Steel.
After Shinils announcement on the Russian ship, Jeils stock prices rose by 30% on South Koreas Kosdaq market. They continued their steep rise on Wednesday morning before Jeil in a regulatory filing clarified that Shinils president would be its second-largest shareholder, not the largest, if the deal goes through. Jeil also said it has no relation to the treasure ship business. Jeils stock prices dropped more than 20% after Thursdays trading.
South Koreas financial supervisory service said it is closely monitoring trade activity involving the shares of Jeil Steel. An agency official said it was watching for possible deceptive practices involving the trade of Jeil shares, including inducing investors through false information.
Investors should beware because its uncertain whether the ship is salvageable and whether Shinil would be able to gain ownership of the assets even if it gets permission to raise it, said the official, who did not want to be identified, citing office rules. Dong-Ah Construction made similar claims over the same ship but failed to deliver on its promises and went bankrupt, causing huge losses for investors.