BBC News

South Korea foreign ministry raided in 'diamond scam'

image captionThe false statement said the diamond mine contained more than 400 million carats of diamonds

The authorities in South Korea have raided foreign ministry offices as part of an investigation into claims that officials were share-rigging.

Staff are accused of issuing a statement in December 2010 that exaggerated the value of a South Korean-owned diamond mine in Cameroon.

Investigators say friends and family were tipped off and made huge profits when the mine's share value shot up.

Among those accused is a senior diplomat in the foreign ministry.

Former energy envoy Kim Eun-seok was removed from his post last week.

Investigators claim that Mr Kim and his family members made millions of dollars in profits from the steep rise in the share price of the South Korea-based company, CNK International, which owns the mine.

He has denied any wrongdoing.

The scandal hinges on a single statement reportedly issued by South Korea's Foreign Ministry a year ago saying that the mine contained more than 400 million carats of diamonds - more than twice the world's total annual diamond production.

The statement was false, but investigators allege that those with prior warning made huge profits, as the company's stock price shot up.

Prosecutors on Monday examined computers and documents belonging to several staff at the ministry.

The country's financial watchdog has called for an investigation into six individuals it accuses of unfair trading in the alleged scam.

The BBC's Lucy Williamson in Seoul says that corruption scandals are a regular feature of South Korean politics and attract a lot of media attention, especially in election years.

South Korean parties are preparing for parliamentary and presidential elections later this year.