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"Unclear Prospects for Oil Field” Report Ignored

Posted April. 14, 2005 23:29,   


It has been found that the KORAIL-affiliated Korea Railway Transportation Development Foundation, despite receiving a report describing the unclear prospect for the Sakhalin oil field last September, a month before paying the contract money for buying the Sakhalin oil field, concealed the fact and went ahead with the business.

According to KORAIL, the foundation received a report through Dr. Kim, a provider of Russia-related information and professor at a Moscow university, on six mining areas in Sakhalin last September, containing information on Russian oil-field-related regulations and the 2004 first quarter accounting report for Petrosakh, which the foundation plans to buy for $62 million.

In the report, Kim gave a negative assessment saying, "It is difficult to conclude at the present stage and an actual inspection of the field`s operation environment and facilities is required to make the final decision."

However, KORAIL`s director of business development, Wang Young-yong (then the foundation`s director), who received the report, paid $6.2 million (about 6.2 billion won) to Alfa-Eco on October 4 without reporting the findings to KORAIL or the foundation`s board of directors.

Ki-Jin Lee doyoce@donga.com