Financial regulators in Singapore, South Korea warn of 'treasure ship' stock bubble

Start-up business Shinil Group said that it had found an imperial Russian navy vessel in the Sea of Japan, saying it was believed to contain gold bullion and coins worth 150 trillion won (S$180.68 billion).
Start-up business Shinil Group said that it had found an imperial Russian navy vessel in the Sea of Japan, saying it was believed to contain gold bullion and coins worth 150 trillion won (S$180.68 billion).PHOTO: EPA-EFE

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 on Friday (July 20) 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, saying it was believed to contain gold bullion and coins worth 150 trillion won (S$180.68 billion).

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

When The Straits Times visited its listed address at International Plaza in Anson Road on Friday (July 20) afternoon, it was found to belong to a firm called Atoz SG Consulting. A staff member said that 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 Byunghwa, could not be reached. The firm also has two Singaporean secretaries, who were not at home when The Straits Times visited. 

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.  

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. 

Critics noted that in 2003, another firm had already sparked an investor bubble by announcing the discovery of the Russian Imperial Navy cruiser Dmitrii Donskoi, which was scuttled by her crew in a 1905 naval battle against Japan, reported Agence France-Presse.

Others pointed out that Russia would have had no reason to load a vast treasure trove on a ship it was sending into battle, and doubly so as it had a land route to its destination Vladivostok anyway.

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

"Concerning the treasure ship salvage project, investors' discretion is recommended as there are risks of them suffering great losses if they rely on rumours," South Korea's Financial Supervisory Service said in a statement.

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

It noted that investors already suffered great losses in 2003 when the bubble burst and Donga Construction Co, which claimed the discovery of the "treasure ship", went belly-up.