Financial regulators urge investor caution over 'treasure ship' find

A handout photo showing an underwater wreck that Shinil Group claimed was the Russian battleship Dmitri Donskoii, which sank in 1905 off Ulleung Island.
A handout photo showing an underwater wreck that Shinil Group claimed was the Russian battleship Dmitri Donskoii, which sank in 1905 off Ulleung Island.PHOTO: REUTERS

SINGAPORE/SEOUL • Rumours of a treasure trove on a Russian ship that sank off South Korea a century ago have sent a company's shares on a roller-coaster ride, triggering a warning yesterday from financial regulators in Singapore and South Korea.

Start-up business Shinil Group announced earlier this week that it had found an imperial Russian navy vessel off Ulleung island in the Sea of Japan, which is also known as the East Sea, saying it was believed to contain gold bullion and coins worth 150 trillion won (S$181 billion).

According to a statement on its website, Shinil Group intends to share its profits from the salvage of the ship "as well as ancillary businesses such as documentary and film production" through its cryptocurrency, called Shinil Gold Coins.

Stocks of Jeil Steel, in which Shinil Group's founder has acquired a large share, had skyrocketed on the news, only to fall by 20 per cent on Thursday and another 30 per cent yesterday.

According to Accounting and Corporate Regulatory Authority filings, Shinil Group was registered in Singapore last month with a paid-up capital of $1.

In response to queries, the Monetary Authority of Singapore (MAS) said that Shinil Group is neither regulated nor licensed by it, and advised consumers to deal only with entities regulated by MAS.

South Korea's Financial Supervisory Service said, in a separate statement yesterday, that "concerning the treasure ship salvage project, investors' discretion is recommended as there are risks of them suffering great losses if they rely on rumours", reported Agence France-Presse.

"Spreading false information or groundless rumours about the 'treasure ship' salvage can be subject to criminal punishment," it added.

The Straits Times visited Shinil Group's listed address at International Plaza in Anson Road yesterday afternoon, and found it to belong to a firm called Atoz SG Consulting. An employee said Atoz offers secretarial services and had helped to incorporate Shinil Group.

Mr Lim Dong-hoon, one of the company's three South Korean directors, said when reached on his mobile phone that he had no information on the shipwreck or the company's activities, and declined to comment further.

Its other two directors - Min Jung-hee and Heo Byung-hwa - could not be reached. The firm also has two Singaporean secretaries, who were not at home when The Straits Times visited.

• Additional reporting by Tiffany Fumiko Tay

A version of this article appeared in the print edition of The Straits Times on July 21, 2018, with the headline 'Financial regulators urge investor caution over 'treasure ship' find'. Print Edition | Subscribe