Sunken gold fever grips South Korea

The world's most fabulous sunken treasure has been found - or an East Sea bubble is about to burst. Rumours are flying that a South Korean company has discovered gold worth $125bn (£87bn) in the wreck of a Russian warship, the biggest maritime discovery of all time - if it is true.

The world's most fabulous sunken treasure has been found - or an East Sea bubble is about to burst. Rumours are flying that a South Korean company has discovered gold worth $125bn (£87bn) in the wreck of a Russian warship, the biggest maritime discovery of all time - if it is true.

The Dong Ah construction company says it has discovered a ship that sank in the straits that divide Korea and Japan during the reign of Tsar Nicholas II. South Korean newspapers are convinced it is the long-lost Dmitri Donskoi, a Tsarist warship that went down in the early years of the 20th century.

South Korean newspapers have dug up unidentified historical records which, they say, show the Dmitri Donskoi had been carrying a huge cargo of gold bars.

The Korea Stock Exchange is not convinced. Yesterday it suspended trading in Dong Ah's shares and demanded an explanation of the rumours. The exchange's concern could have something to with the fact that Dong Ah Construction and Industrial Co, the nation's fifth-largest builder, has been bankrupt for a month.

In the two days since the rumours of its Eldorado at the bottom of the sea first emerged, Dong Ah's share price has leapt up by 30 per cent. There are other problems with this South Korean fairy tale.

To be worth $125bn at today's prices, there would have to be 14,000 tonnes of gold in the wreck of the ship, 13 per cent of all the gold mined in the world. Dong Ah will confirm only that it has found a sunken ship, and denies there is gold on board. A spokesman said the company had no clues about the identity of the ship, and admitted information on the wreck was being kept under wraps even within the company.

An official from the Korea Ocean Research Institute, which made a year-long hunt for the Dmitri Donskoi under a contract with Dong Ah, said the search for the Russian boat had been suspended for months.

Russian officials scornfully brushed the reports aside as "utter nonsense" yesterday, saying the most Dong Ah could have found is a petty cash box.

"It is out of the question that [the warship] had gold bars in its hold, because it was Russia's practice to send gold to the Far East on special rail cars," said Sergei Klimovsky, the scientific secretary of St Petersburg's central naval museum.

"If they found anything, it could be the cash box for the officers' money supply."

The legend of fabulous treasure hoards in sunken Russian ships first took hold of the Far East in 1993, when Japanese divers discovered the wreck of the Admiral Nakhimov in the same waters as the Dmitri Donskoi. The Japanese divers found no treasure.

The Dmitri Donskoi, which was hopelessly under-armed, say military historians, sank off the Korean coast in 1905, during the Russian navy's devastating defeat in the Russo- Japanese war - a defeat which incensed the Russian public and contributed to the 1917 Bolshevik Revolution.