A Seoul court on Friday handed down a suspended 18-month sentence to the head of a mine developer for reaping massive profits from a stock price rigging scam linked to a diamond mining project in Cameroon.
CNK International President Oh Deok-gyun, 49, was indicted on charges of pocketing about 90 billion won ($81 million) by exaggerating the volume of diamond reserves in a Cameroon mine through a press release in 2010.
He was additionally charged with committing malpractice that cost the company 11 billion won and violating the Foreign Exchange Transaction Act.
Oh was only convicted of violating the Foreign Exchange Transaction Act and was acquitted of the other charges. The Seoul Central District Court sentenced him to one year and six months in prison, suspended for two years.
Put out by the South Korean foreign ministry in December 2010, the press release claimed the company won a project near the southeastern Cameroon town of Yokodouma to mine about 420 million carats of diamonds, or 2.5 times the annual global production at the time, prosecutors said.
The news sent CNK shares jumping more than fivefold in the first three weeks, from about 3,000 won apiece to 16,100 won.
The mine, however, was later found to hold only 6 percent of the claimed reserves. The project was eventually handed over to a Chinese company.
In the same ruling, the court also acquitted another key defendant in the case — Kim Eun-seok, the former Energy and Resources ambassador at the foreign ministry — of charges that he colluded with Oh in the scheme. Kim was alleged to have played a role in getting the foreign ministry to issue the press release on the diamond project.
Prosecutors initially sought prison terms of 10 and five years against Oh and Kim, respectively. (Yonhap)
