Posted January. 20, 2012 08:25,
The Foreign Affairs and Trade Ministry is panic mode in the wake of a stock rigging scandal that has implicated high-ranking diplomats and CNK International, a Korean diamond developer in Cameroon.
The ministry is under criticism for letting the scandal snowball despite that suspicions were first raised a year ago, seemingly focusing on making excuses for failure to act. Fears are also growing of yet another crisis of trust for the ministry, which suffered severe criticism in 2010 after the daughter of then Foreign Minister Yu Myung-hwan received preferential treatment in hiring.
The Foreign Ministry went into damage control Thursday, a day after financial authorities announced that a ministry news release on CNK`s development of a diamond mine in Cameroon was "false and exaggerated." Ministry officials were speechless after discovering that their ministry presented false information use to raise CNK`s stock price, resulting in a criminal probe.
When the scandal first surfaced last year, the ministry focused on explaining the situation without making rigorous fact-finding efforts. The ministry issued a second news release in June last year to give an explanation for the scandal. Back then, rumors of it had been spreading in the Korean stock market. The ministry, however, reiterated its claim that the Cameroonian government conducted a "strict" review in the exploration process, was careful about granting mining concessions, and "officially recognized" CNK`s exploration report.
In the following parliamentary audit sessions, the ministry circulated lengthy reference materials among lawmakers, claiming nothing was wrong about CNK`s project. In a document released Sept. 25 last year on senior government officials` visits to Africa, the ministry stressed the need to publicize success stories of Korean companies in Africa.
In the document, the ministry cited a South African mining consulting company`s project technical report as grounds for its optimistic evaluation of the project. According to the document, the report said CNK`s diamond development project had "good potential."
Also listed, however, was other items including geological challenges, safety fears, seasonal issues and Cameroon`s unfavorable business environment. In addition, the report said the environmental evaluation that CNK said had been completed in 2009 failed to meet international standards and was vulnerable to nongovernmental environmental activist groups.
Nevertheless, the ministry balked at disclosing information to be used to find facts about the project. Chung Tae-geun, an independent lawmaker, requested that the ministry provide him with documents published by the U.N. Development Program that the ministry used to estimate the diamond deposits. The request was rejected, however, after the ministry cited diplomatic practices. Chung said the information had been made public by the U.N. program, blaming the ministry for making an organized effort to cover up the scandal.