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Collapsed Building Firm Owned Ruby Worth £11m ?


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Collapsed building firm owned ruby worth £11m

Aidan Jones The Guardian, Monday 16 March 2009 history

Administrators are trying to unravel the mystery of an £11m ruby claimed as an asset by a Shropshire construction company that collapsed last week with the loss of more than 400 jobs. The ruby, cited as the Gem of Tanzania, was listed in Wrekin Construction's 2007 accounts, raising questions over the reasons for its ownership by a mid-sized building firm. Ernst & Young, which is acting as the administrator, says it is "too early to comment" on the provenance of the gem or reports that it was bought to inflate the value of Wrekin's assets. Wrekin directors could not be reached for comment

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Collapsed building firm owned ruby worth £11m

Aidan Jones The Guardian, Monday 16 March 2009 history

Administrators are trying to unravel the mystery of an £11m ruby claimed as an asset by a Shropshire construction company that collapsed last week with the loss of more than 400 jobs. The ruby, cited as the Gem of Tanzania, was listed in Wrekin Construction's 2007 accounts, raising questions over the reasons for its ownership by a mid-sized building firm. Ernst & Young, which is acting as the administrator, says it is "too early to comment" on the provenance of the gem or reports that it was bought to inflate the value of Wrekin's assets. Wrekin directors could not be reached for comment

You really couldn't make this s**t up!

It seems that 90% of the world was blinded by greed, to the point of insanity, over the last 10 years. I wonder how many firms were actually truly profitable over the past 10 years, without having to resort to all manner of fraud to inflate their profits?

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Collapsed building firm owned ruby worth £11m

Aidan Jones The Guardian, Monday 16 March 2009 history

Administrators are trying to unravel the mystery of an £11m ruby claimed as an asset by a Shropshire construction company that collapsed last week with the loss of more than 400 jobs. The ruby, cited as the Gem of Tanzania, was listed in Wrekin Construction's 2007 accounts, raising questions over the reasons for its ownership by a mid-sized building firm. Ernst & Young, which is acting as the administrator, says it is "too early to comment" on the provenance of the gem or reports that it was bought to inflate the value of Wrekin's assets. Wrekin directors could not be reached for comment

I suppose that rubies don't set off airport detectors, so might have disappeared, secreted somewhere safe,

where the sun don't shine.

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Sadly, your thread should actually be entitled; "Collapsed building firm paid £11m in shares for ruby worth £18k" because that's the fact of the matter.

It is ludicrous, and one of the most stunning examples of corporate buffoonery I've heard outside of the financial sector.

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Even better summary of the situation here:

http://www.contractjournal.com/Articles/20...y-gemstone.html

When David Unwin arrived as Wrekin Construction’s white knight two years ago it wasn’t £11m of cash he was wielding to save the stricken Shropshire-based group – as has been commonly assumed – but a giant gem stone with “a fair value of £11m”.

Wrekin bought the sparkler — known as “The Gem of Tanzania” — in a deal that saw the firm issue £11m-worth of new preference shares and handing them over in exchange.

In other words, there was no new money to turn around the company’s fortunes. Wrekin had racked up a loss of £9m in the previous year as a result of a disastrous expand-at-all-cost policy by the former owners.

However the £11m gem was a new asset that helped to transform the appearance of Wrekin’s balance sheet from an £8m liability (31 March 2007) to net assets of £6m (31 December 2007) – even though the only material difference was the £11m-worth of preference shares that had been issued.

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As one creditor affected by Wrekin’s collapse into administration told CJ: “Preference shares can be called in at short notice. It’s no wonder the banks were worried.

“We were as well. Wrekin’s credit rating had dropped from £500,000 before Christmas to £100,000, that’s what we heard from the credit rating agency we use.

“I was also talking to three other subcontractors who’d not been paid by Wrekin since before Christmas and I was aware of two County Court judgements against Wrekin in recent months.”

With Wrekin in urgent need of saving two years ago, the transformation was achieved when the glorious ruby gemstone appeared.

Its validity and worth came guaranteed, according to Wrekin, by a professional valuer at the Instituto Gemmologico Italiano, based in Valenza, Italy, on 31 August 2007.

Asked if it had ever sat innocently on his desk as a paperweight, Wrekin’s joint managing director Peter Greenwood said: “No.”

Has he ever even seen this elusive dazzler? “No,” again is the reply.

Greenwood says the Gem of Tanzania is tucked away in a safe deposit box in the UK.

Could the valuation be all a load of fiction? Apparently not as Wrekin has had it re-valued annually.

Why couldn’t it have been flogged off and the £11m used to save Wrekin and all its employees?

The answer is that the £11m-worth of preference shares had already been issued against its value.

Wrekin's saviour two years ago was stated at the time as being London and Middle Eastern Group. However that name never showed up in Wrekin’s subsequent accounts.

David Unwin owns London and Middle Eastern Group and operates out of an office in Lows Lane, Stanton-by-Dale, Ilkeston, Derbyshire.

Unwin actually bought Wrekin through one of his other vehicles, Tamar Group.

Tamar Group owns a whole string of operating companies:

Tamar Land and Property

London & Middle Eastern

Stanton Recycled Aggregates

HCL Equipment

Equatrak (UK)

Midland Land Recovery

The ultimate controlling party of Tamar is David Unwin.

On 1 January 2007 Tamar Group had net assets of £430,000 but ended the year with a net debt of close on £16m.

Contributing to Tamar’s soaring debts were:

cash outflow of £2.9m;

acquisitions (excluding cash and overdrafts) of £8.8m;

other non-cash changes of £4.4m.

Tamar’s turnover (12 months to 31 Dec 2007) was £38m (figure in 2006: £16m) and this produced a pre-tax profit of £3.3m (previous year: £350,000).

The gemstone makes an appearance in Tamar’s accounts, a revaluation being said to have put its worth at £10.7m.

This is simply mind boggling.

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Even better summary of the situation here:

http://www.contractjournal.com/Articles/20...y-gemstone.html

This is simply mind boggling.

It really does get better:

http://www.birminghampost.net/birmingham-b...65233-23133971/

However, the Istituto Gemmologico Italiano, a government-recognised Italian institution, said it had no records of the “Gem of Tanzania”, was not open in August, and did not do any valuations at its site in Valenza, which was solely for teaching.
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Collapsed building firm owned ruby worth £11m

Aidan Jones The Guardian, Monday 16 March 2009 history

romancing-the-stone.jpg

Administrators are trying to unravel the mystery of an £11m ruby claimed as an asset by a Shropshire construction company that collapsed last week with the loss of more than 400 jobs. The ruby, cited as the Gem of Tanzania, was listed in Wrekin Construction's 2007 accounts, raising questions over the reasons for its ownership by a mid-sized building firm. Ernst & Young, which is acting as the administrator, says it is "too early to comment" on the provenance of the gem or reports that it was bought to inflate the value of Wrekin's assets. Wrekin directors could not be reached for comment

Edited by Nicholas Cage
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Nah, your child's doll has two glass eyes - one blue one and one red one ;)

Quite normal on the red eye flight.

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It's OK guys the ruby is now being offered on E- Bay

The Gem of Tanzania" on eBay, also Natural Rubies, Ruby, Loose ... Find "The Gem of Tanzania" in the , Natural Rubies , Ruby , Loose Gemstones , Jewellery Watches category on eBay.co.uk.

cgi.ebay.co.uk/%22The-Gem-of-Tanzania%22_W0QQitemZ260377321564QQcmdZViewItemQQimsxZ2009

Panic over

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Collapsed building firm owned ruby worth £11m

Aidan Jones The Guardian, Monday 16 March 2009 history

Or, maybe not. This was front-page on the FT this weekend... the details were damning... and strongly suggested that the ruby was an invented asset with falsified documentation that was used to obtain secured lending from the RBS.

Having read about the shady dealings of the Yakuza (Japanese gangsters) exposed by the 1990 crash, this sort of thing should come as no surprise. The Japanese came across a plethora of frauds committed with false/duplicated/borrowed/copied 'certificates of deposit' - which had permitted organised crime to make many speculative investments - often in real-estate. It comes as no surprise that similar things have been happening in the UK.

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Sellers information on E-Bay

"The Gem of Tanzania"

The most valuable ruby in the history of the world, ever! (allegedly)

Here we have for sale an item of unparalleled rarity. In fact it's so rare there are a lot of people who think it doesn't exist!

Ideal collateral for bank lending, helps boost your balance sheet it's a once in a lifetime offer and far better than any government backed lending plan (unless of course you're a bank that is).

Signed valuation from Sotheby's Chrisities Gerald Ratner Sir Fred Goodwin (Although Fred might not want to hand this over as he doesn't like giving things back)

Prefer collection in person but will post by Royal Mail Special Delivery although the insurance may be a bit steep.

I'm open to "Buy it now" offers.

Terms of Sale:-

Direct transfer to my off shore bank account in the Cayman Islands.

Sorry I won't take PayPal for this item, the fees would be eyewatering and I really don't fancy getting a chargeback a month or so later.

Payment in company stock or shares not acceptable (what do you think I am a Scottish banker or something?)

No bidding from Tanzanian's then claiming it belongs your mother country anyway and you're not paying for it and it should be returned!

However I will ship to Nigeria, especially if you're a Doctor and have suddenly stumbled across a bank account of a deceased family member which contains enough cash to sort out the UK nation deficit. Don't go asking for deposits though..do you think I'm stupid or something?

Happy bidding

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http://www.ft.com/cms/s/0/e7a878aa-100c-11...html?ftcamp=rss

Note 13 of Wrekin’s 2007 accounts states: “The fair value of the ruby gemstone was determined by a professional valuer at the Instituto Gemmologico Italiano (sic) based in Valenza, Italy, on 31 August 2007.”

Loridana Prosperi, a gemmologist at the head office of the Istituto Gemmologico Italiano in Milan, said: “That is impossible, because we were on holiday on August 31 2007.”

She said IGI never assesses the price of gemstones, only the quality – and the Valenza office does not even do that.

Ms Prosperi said an £11m ruby would be equivalent to “The Black Prince”, a jewel the size of a chicken’s egg in the Queen’s crown. She said she would like to get a look at “The Gem of Tanzania”. She is not the only one

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Hang about... is this putative bit of bling called the Gem of Tanzania or the Star of Zanzibar?

Star of Zanzibar

Gem of Tanzania

I am alarmed to have discovered an inconsistency in what was otherwise a wholly credible account.

Can this get any better?

Incidentally, you could probably have it made for £10 : http://www.syntheticgems.org/Rough%20Stone.asp

Synthetic ruby at that site costs $0.166/gram

Edited by Sledgehead
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Oh dear. I wouldn't like to be in the shoes of Wrekin's auditors right now, nor those of its directors.

The jokers at Wrekin actually went on the Today programme saying they had just won millions in new orders for government infrastructure projects and complaining that another arm of government was about to pull the plug; strangeley they failed to mention the Gem of Tanzania/Star of Zanzibar.

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