Korean firm apologises after admitting it found NO treasure in wreck
South Korean firm which boasted it had found sunken Russian treasure ship now faces stock market probe after admitting $130bn in gold cargo may not exist
- Start-up Shinil Group announced last week it had discovered ship Dmitri Donskoi
- It said the ship was believed to contain gold bullion and coins worth $130 billion
- But financial regulators on Wednesday launched an investigation into the firm
- Now it has admitted that it has not gleaned any riches from the Russian wreck
A South Korean company that said it had found a long-lost Russian ‘treasure ship’, causing a stock market flurry, has apologised after admitting it had not gleaned any riches from the wreck.
Start-up Shinil Group announced last week it had discovered the imperial vessel Dmitri Donskoi off South Korea’s east coast, saying the ship was believed to contain gold bullion and coins worth $130 billion.
But financial regulators on Wednesday launched an investigation into the firm after news of the discovery caused the stock price of Jeil Steel – a company in which Shinil’s founder had acquired a large stake – to jump fivefold.
Critics noted that in 2003 another firm had already sparked a stock bubble by announcing the discovery of the Donskoi, which sank in a 1905 naval battle against Japan.
Start-up business Shinil Group announced last week it had discovered imperial vessel the Dmitri Donskoi off South Korea’s east coast
A Russian campaign group had previously demanded that the entire fortune be returned to Moscow as a ‘goodwill gesture’. Pictured: The ship underwater
The Donskoi was believed to have been carrying the gold supplies of the entire Second Pacific Squadron when it sank
The ship was escorting transport vessels at the rear of the Second Pacific Squadron when the flotilla was attacked by a much larger Japanese force at the Battle of Tsushima (pictured after being refitted)
Today, Shinil said it may have gone overboard on the claims and apologised for the ‘misunderstanding’, saying speculation on the value of treasure contained within the ship was based on news reports and unverified documents.
‘We sincerely apologise to the people for this irresponsible citation,’ said Choi Yong-seok, the firm’s CEO, bowing before TV cameras and photographers at a press conference.
Jeil Steel stock had hit 5,400 won (£3.67) but nosedived to around 1,785 won (£1.21) on Thursday, while Shinil replaced its board members and changed its name to Shinil Maritime Technology Co.
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At the press conference, the company played a brief clip of underwater footage that appeared to show the ship, with the word ‘Donskoi’ visible on the hull – but it stopped short of entering the wreck.
Observers have also questioned whether the claims were aimed at funnelling investment into a virtual currency which Shinil Group in Singapore had recently started to issue.
Choi insisted Shinil Group in Singapore had nothing to do with Shinil Group in Korea, although the two companies’ founders are siblings and Shinil Group in Singapore has been selling virtual coins, reportedly with a promise of handsome returns in case treasure is salvaged from the ship.
At least 60 of the crew were killed and 120 more wounded, including Captain Ivan Lebedev, who ordered the ship to anchor off Ulleungdo and took his men ashore
The Donskoi was launched in 1883 and spent most of its life operating in the Mediterranean before being deployed to Russia’s Second Pacific Squadron in 1904 after much of Russia’s Far Eastern forces were destroyed by Japan
Officers on board the Donskoi, including a man believed to be Captain Ivan Lebedev (far right), who was wounded before the warship was scuttled and later died from his injuries
He also said Jeil Steel is not associated with Shinil although Shinil’s founder had acquired the stake in Jeil Steel before the discovery of the sunken ship.
Experts have said imperial Russia would have no reason to load vast treasure on a ship that was going into battle and have also noted that there was a safer land route to Vladivostok, the treasure’s supposed final destination.
A Russian campaign group had previously demanded that the entire fortune be returned to Moscow as a ‘goodwill gesture’.
Yaroslav Livanskiy, an official of the Russian Public Movement to Commemorate Those Who Died Defending the Motherland, led the calls.
At the press conference, the company played a brief clip of underwater footage that appeared to show the ship
Imperial Russian naval cruiser the Dmitri Donskoi sank in a 1905 battle against Japan
The warship was guarding transport vessels at the rear of the convoy when it was intercepted by a much larger Japanese fleet in May 1905
An underwater camera reveals a glimpse of the Dimitrii Donskoi, 113 years after it was sunk to stop the Japanese taking it
Livanskiy, who is also head of a salvage group in eastern Russia, said: ‘The cruiser is a priceless find for Russia, an invaluable relic, a symbol of our heroic and tragic past, a part of military history of Russia.
‘Therefore whatever was discovered on board of the cruiser is inseparable from the overall value of the find.’
The armour on the side of the hull is well-preserved while the cannons, machine guns, anchor and steering wheel are all still in place.
‘World War Zero’: How Russia’s humiliating defeat in Russo-Japanese war set stage for decades of warfare
Fighting took place in modern-day northeast China in 1904-1905 after Russia and Japan clashed over trading ports and the Korean peninsula.
Japan declared war and attacked Port Arthur on the same day. The attack was planned to neutralise the Russian Far East Fleet while it was still in the port.
In the Battle of Port Arthur, three of Russia’s largest navy ships – Tsesarevich, Retvizan, and Pallada – were significantly damaged
One Russian ship, the Petropavlovsk, escaped Port Arthur and was sunk by mines. A second, the Pobeda, had to return to port.
While Japanese attacks were successful at sea, land attacks against Russian forces initially failed.
But at the Battle of Liaoyang, Russia forces sent to support Port Arthur pushed back by Japanese. It also left them with land from where they could fire on Russian ships in Port Arthur bay.
Every ship in Russia’s Pacific fleet was sunk by the end of 1904.
In January 1905, Russian Major General Anatoly Stessel, commander of the Port Arthur garrison, surrendered.
Demoralised Russians had to watch as Japan took control of the Korean peninsula in just a couple of months.
Russia surrendered Port Arthur to the Japanese and had to recognise Japanese control of Korean peninsula.
The costly, humiliating series of Russian defeats in the Russo-Japanese War left the Russian Empire demoralized.
The losses added to anger in Russia at Czar Nicholas II and ultimately the dissent would lead to the Russian Revolution in 1917.
A large number of iron boxes were also discovered in the ship’s hold, which were assumed to contain gold.
The firm originally pledged to donate 10 per cent of their find to help develop Ulleungdo, which is a largely uninhabited island but an important tourist destination for South Korea.
Development plans would have included a museum dedicated to the ship, according to The Telegraph.
Divers from salvage firm Shinil Group had been searching for the wreck for years and finally located it on July 14 at a depth of 1,400ft around a mile off the coast of Ulleungdo.
The Donskoi was launched in 1883 and spent most of its life operating in the Mediterranean before being deployed to Russia’s Second Pacific Squadron in 1904 after much of Russia’s Far Eastern forces were destroyed by Japan.
The warship was guarding transport vessels at the rear of the convoy when it was intercepted by a much larger Japanese fleet in May 1905.
What followed became known as the Battle of Tsushima and was disastrous for Russia, with 21 of its 38 ships sunk and 4,500 killed – compared to just three Japanese ships lost and 117 dead.
The Donskoi escaped the battle itself, though was badly damaged and began steaming for the Russian port of Vladivostok.
Before it could get there it was intercepted by the Japanese, who opened fire.
At least 60 of the crew were killed and 120 more wounded, including Captain Ivan Lebedev, who ordered the ship to anchor off Ulleungdo and took his men ashore.
The following day the ship was scuttled to stop it falling into Japanese hands and the crew surrendered. Captain Lebedev later died of his wounds.
The Donskoi was believed to have been carrying gold supplies for the entire flotilla, which would have been used to pay port fees and the salaries of crew and captains while at sea.
It is was thought possible that smaller gold stores kept on board other vessels in the flotilla were transferred to the Donskoi as they went down.
Given a history of false claims about discovering the Donskoi in the past, Shinil Group promised to bring some of Lebedev’s personal effects to the surface as further proof of their discovery.
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