North Korea’s nuclear HQ ... in leafy London suburbia
Under the noses of spooks, this house has helped fund Kim’s missiles for TEN years
NORTH KOREA’S nuclear weapons programme has been secretly funded to the tune of tens of millions of pounds from a detached house in a leafy London suburb.
Officials from the pariah state have bankrolled the development of its deadly nuclear arsenal from the anonymous looking property for more than a decade – under the noses of Scotland Yard and the security services.
An investigation by The Mail on Sunday has discovered that up to £33 million a year has been funnelled through an apparently innocuous insurance company based at the home in Blackheath, South East London, but controlled directly by Kim Jong Un and his father Kim Jong Il’s dictatorial regimes.
Last night Government officials confirmed the company, The Korea National Insurance Corporation ( KNIC), has only recently been closed down and had its assets frozen because of fears it was funding the development of weapons of mass destruction. It is understood police and Treasury officials raided the property last year. Neighbours recalled police activity at the house, but this has not been confirmed.
The move, which followed investigations by the Treasury and the European Commission, is the latest in a series of tough economic sanctions imposed by the West after
‘I just wish it had been closed down earlier’
North Korea shocked the world a decade ago by testing a nuclear bomb. Restrictions include an arms embargo and trade that might help the country’s military.
KNIC was targeted as a way of cutting off vital funding to the regime and its weapons programme.
The company was shut down after an EU probe looked into its activities, including concerns KNIC was being used as a vehicle to pay companies illegally supplying military parts and expertise to North Korea in breach of United Nations Security Council resolutions.
Following the high level inquiry, KNIC was ordered to stop trading and was blacklisted.
South Korean reports said that two North Korean officials working for the company were deported but the Home Office refused to confirm this.
An EU report into KNIC, seen by The Mail on Sunday, concluded: ‘ The Korea National Insurance Corporation, a state- owned and controlled company, is generating substantial foreign exchange revenue which could contribute to the DPRK’s [ Democratic People’s Republic of Korea] nuclear-related, ballistic missile-related or other weapons of mass destructionrelated programmes.’
North Korea, which also uses a detached home in Acton, West London as its embassy, is challenging the ruling and has hired a top London barrister, Maya Lester QC – the daughter of a Liberal Democrat peer – to fight the case in the European courts. She failed to respond to a request for comment. When The Mail on Sunday visited the property on Thursday, a chauffeurdriven black Mercedes saloon with diplomatic registration plates pulled up outside. Moments later a middle-aged man wearing a grey suit and glasses emerged from the car accompanied by a woman believed to be his wife.
The couple confirmed the house was owned by KNIC and that the company had been shut down. But when asked if they were working for Kim Jong Un, the man said: ‘I answer nothing.’
A neighbour added: ‘ We saw police cars outside the house last year but we didn’t know at the time it was a raid. It is frightening to realise North Korean government officials are so nearby.’
Last night former Foreign Secretary Sir Malcolm Rifkind welcomed the Government’s clampdown on KNIC. He said: ‘The blacklisting sounds extremely sensible and my only disappointment is that it didn’t happen earlier.
‘The North Koreans are singleminded and use all the devices available to them. But it is good that what they’re doing is being identified and, where appropriate, being stopped.’
With its neatly trimmed shrubs and gravel driveway, the house from where KNIC officials ran their global moneymaking empire
‘It was their policy to exaggerate losses’
looks like any other family home. But behind the curtains its executives made millions for the Stalinist regime in the lucrative international insurance markets, including deals in shipping and airlines.
Official documents reveal that the spacious property in Kidbrooke Park Road was purchased by the North Korean government in March 2006 for £542,500 and Land Registry documents confirm KNIC as the sole proprietor.
Companies House records show that the huge sums made by the company were funnelled back to the regime in North Korea’s capital Pyongyang. Latest accounts show that KNIC doubled its profits in 2014 from the previous year to £ 69 million, of which £ 33 million was sent back to North Korea in what is described as a ‘payment to the State’. KNIC’s 11 directors are l i sted as l i ving i n Pyongyang. KNIC’s coffers were also boosted by a legal victory in the Court of Appeal in London in 2008 which is understood to have generated £ 30 million. The settlement followed the court finding in its favour in a dispute with a group of Londonbased reinsurance companies.
The companies, which included German financial giant Allianz, had refused to honour a reinsurance agreement with KNIC after a helicopter crash in Pyongyang.
As the insurers of North Korea’s state airline, which owned the helicopter, KNIC compensated all those affected by the crash. KNIC then attempted to claim back its losses from London-based reinsurers.
But the reinsurers accused the North Koreans of staging the crash
and seeking a financial settlement in a bid to obtain large sums of foreign currency.
The Court of Appeal concluded fraud could not be proved, forcing the reinsurers to pay up.
Defector Kim Kwang Jin, who worked for a North Korean bank which worked closely with KNIC, claimed it was company policy to exaggerate losses to make money. He said: ‘They would fake things, they would increase the losses and fabricate the numbers. If there was a crack in a ship they would say the ship had sunk.
‘ The KNIC insurance business went on a long time because it was so profitable.
‘There were maybe two or three officials and their families in London but I don’t know their names.
‘They worked to the plan of Kim Jong Il [the dictator who ran North Korea from 1994 until his death in 2011].
‘ The money from KNIC came back to North Korea from banks in London. It was used to pay for the leader’s key projects such as the nuclear and military programmes.’
Treasury officials confirmed last night that KNIC had been added to a list of banned companies. North Korea is also forbidden from selling the property. However, former KNIC officials are permitted to live there as long as the property is not used for commercial purposes. The Mail on Sunday made a separate approach to the North Korean embassy in Acton in a bid to find out information about KNIC.
An official, who refused to be named, said: ‘ The EU is making baseless assumptions about KNIC. The company and its workers have been made scapegoats.
‘KNIC has not funded the nuclear programme.
‘But North Korea is a sovereign state and no international law prevents a sovereign state from developing nuclear weapons.
‘So it is our right to build them and we completely
‘It’s our right to develop nuclear weapons’
reject the United Nations Security Council resolutions banning our ballistic programme.’ The regime also attempted to purchase optical equipment for unmanned drones from a UK company. The elaborate plan, which involved fake documents and arms traders, was foiled by Customs officials. A UN report into the arms scandal said: ‘In February 2015, the United Kingdom informed the UN about an attempt by the Democratic People’s Republic of Korea to procure “sanctioned goods” from a British manufacturer, stating that they i ncluded miniaturised optical equipment that could be used in Unmanned Aerial Vehicles (UAVs). The export licence application showed that the person who sought to procure the goods was Richard Wang (Derwen Wang in Chinese). Derwen Wang was listed as the director of HK Conie Technology, originally registered in the British Virgin Islands before being registered in Hong Kong.
‘ Mr Wang used the name of a major Chinese company to falsify the export licence application and end-user statement. The panel concludes this was an attempted procurement of military-grade goods for use in a UAV by individuals acting on behalf of the Democratic People’s Republic of Korea and is continuing its investigation.’