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Remember That Ruby Worth £11m?

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Good find. I've been wondering what happened to The Gem of Tanzania. Eleven million quid down to a hundred quid. Fair old reduction.

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Wrekin ruby’s £11m value falls like a stone

By Jonathan Guthrie in Birmingham

Published: September 30 2009 19:54 | Last updated: September 30 2009 19:54

One of the strangest tales in the history of company accounting looks increasingly likely to end with a fabled gem being downgraded to an unusual paper weight.

The Gem of Tanzania, a large ruby whose £11m valuation once underpinned the finances of a failed company with yearly turnover of £103m, may be worth as little as £100.

Rebuffed by large auction houses, administrators to Wrekin Construction, a Shropshire building company, are now planning to advertise the big purple rock in a small magazine whose subjects includes New Age crystals.

The police said on Wednesday that they were considering whether to mount a fraud investigation, while forensic accountants are already on the case.

After Wrekin collapsed in May it emerged that the main asset of the business was a £11m ruby. Derbyshire businessman David Unwin used the jewel, previously valued at £300,000, to revive the balance sheet of Wrekin, which he bought in 2007.

An FT investigation found that the gem was sold to a South African-born businessman for the equivalent of £13,000 in Tanzania in 2002. The jewel was then handled by at least one other intermediary before Mr Unwin bought it through a land deal.

Two key valuation documents acquired by Mr Unwin with the gem were denounced as forgeries by the purported valuers. Mr Unwin has consistently said that he is innocent of any wrongdoing. Supporters say that he would be the victim of any fraud.

Administrators to Wrekin at Ernst & Young, the accountancy firm, said on Wednesday that the 2.1kg gem would be advertised for sale in Rock ‘n’ Gem – a quarterly UK magazine, read by mineral collectors and devotees of “healing†crystals. The Gem of Tanzania will also be advertised on a website mainly devoted to selling second-hand industrial equipment.

It is understood that prestigious London auction houses rejected the gem because its value was too low. The fact that Ernst & Young is selling the ruby as a specimen suggests it cannot be cut profitably into individual jewels.

Marcus McCallum, a Hatton Garden gem dealer said: “The Gem of Tanzania may not be worth the cost of the advert. A two kilo lump of anyolite [a low grade form of ruby] is probably worth about £100. A valuation of £11m would be utterly bonkers.

http://www.ft.com/cms/s/0/6c76dffe-adec-11...?nclick_check=1

Pure fraud <_<

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Guest sillybear2

In the history of human follies this deserves a place next to a South Sea share certificate, maybe the BoE will buy it for their museum?

Have you seen it?

_45597347_ruby.jpg

B)

It looks like somebody did a switcheroo with a lump of coal somewhere along the line.

Edited by sillybear2

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Have you seen it?

<img src="http://newsimg.bbc.co.uk/media/images/45597000/jpg/_45597347_ruby.jpg" border="0" class="linked-image" />

<img src="http://www.housepricecrash.co.uk/forum/public/style_emoticons/<#EMO_DIR#>/cool.gif" style="vertical-align:middle" emoid="B)" border="0" alt="cool.gif" />

Jeezus, who on earth would be fooled by that? Did Anorthosite just crap that out?

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The Wrekin Ruby was not the only piece of creative accounting that the shyster who owned Wrekin (for less than two years) used

For example:

Common accounting practice is to write off an assett in the books over a period of years. Wrekin would write off, say, a JCB excavator over 4 years. At this point Wrekin's owner would sell the JCB to a plant disposal company he owned ( Equitrek) for £1. Three months later Wrekin would buy the same JCB back from Equitrek at full market value, say £25,000. A nice way to take £25,000 out of the company and into the owners pocket.

Apparently in the last 12 months of Wrekin's life over £2 million was taken out of the company by these kind of scams.

The reason I know this ?

I was an employee of Wrekin for many years right up until their demise. The JCB scam was one that was uncovered by some of the guys below Director level a couple of weeks befor they went under - and yes it has been bought to the attention of the Administrators.

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Have you seen it?

<img src="http://newsimg.bbc.co.uk/media/images/45597000/jpg/_45597347_ruby.jpg" border="0" class="linked-image" />

<img src="http://www.housepricecrash.co.uk/forum/public/style_emoticons/<#EMO_DIR#>/cool.gif" style="vertical-align:middle" emoid="B)" border="0" alt="cool.gif" />

Looks like the Beef Wellington Gordon Ramsay sent back in last nights Hells Kitchen USA

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"The Gem of Tanzania, a large ruby whose £11m valuation once underpinned the finances of a failed company with yearly turnover of £103m, may be worth as little as £100."

Well, it went for £8k... I suppose an EA would say that was a 80* increase on the £100 valuation...

http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/7253078/11m-ruby-belonging-to-collapsed-firm-sells-for-8000.html

But I would say £11m to £8k myself :)

Edited by dryrot

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"The Gem of Tanzania, a large ruby whose £11m valuation once underpinned the finances of a failed company with yearly turnover of £103m, may be worth as little as £100."

Well, it went for £8k...

The history attached to it might be worth that much to someone <_<

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Have you seen it?

_45597347_ruby.jpg

OLD STORY - SHOULD LOOK AT THE DATE !

Looks like a badly cooked piece of fillet steak to me

Edited by monks

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Or theft.

Are you sure that the original wasn't an £11 million piece of jewel, that was "switched" by an employee at some point?

As sure as one could be. A genuinely valuable stone would not require badly faked valuation reports, and could have been sold early on and the money used to repair the balance sheet without inviting ridicule (which it did even at the time, seeing as no-one sane believed the valuation even then).

I suppose your theory is possible in the same way that you cannot rule out there being invisible unicorns on the moon :-)

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As sure as one could be. A genuinely valuable stone would not require badly faked valuation reports, and could have been sold early on and the money used to repair the balance sheet without inviting ridicule (which it did even at the time, seeing as no-one sane believed the valuation even then).

I suppose your theory is possible in the same way that you cannot rule out there being invisible unicorns on the moon :-)

That was all part of the elaborate plot to make away with a priceless stone. They just made it obvious it was flawed from the start.

Smart criminals. :ph34r:

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<br />Good find. I've been wondering what happened to The Gem of Tanzania. Eleven million quid down to a hundred quid.

Fair old reduction.

Vanity Fair?

"My paradigm derives from the Vanity Fair episode in Bunyan's Pilgrim's Progress, both a general allegory of the World, the Flesh and the Devil and a precise portrait of the drunken, jeering, Conformist Culture of the early Restoration, which taunts the austere and disdainful pilgrim for his black clothing and godly dialect, tries to force him into con-sumerism, and then installs him in a cage at the very centre of the Fairground.

That cage preserves the marginalised ‘Puritan’ at the very centre of the victors' culture, and guarantees some receptiveness, however hostile, to his resurgence."

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<br />The Wrekin Ruby was not the only piece of creative accounting that the shyster who owned Wrekin (for less than two years) used<br /><br />For example:<br /><br />Common accounting practice is to write off an assett in the books over a period of years. Wrekin would write off, say, a JCB excavator over 4 years. At this point Wrekin's owner would sell the JCB to a plant disposal company he owned ( Equitrek) for £1. Three months later Wrekin would buy the same JCB back from Equitrek at full market value, say £25,000. A nice way to take £25,000 out of the company and into the owners pocket.<br /><br />Apparently in the last 12 months of Wrekin's life over £2 million was taken out of the company by these kind of scams.<br /><br />The reason I know this ?<br /><br />I was an employee of Wrekin for many years right up until their demise.  The JCB scam was one that was uncovered by some of the guys below Director level a couple of weeks befor they went under - and yes it has been bought to the attention of the Administrators.<br />

Sounds like the asset stripper, rip-off directors who 'wrekined' M.G.cars (who were never locked up!)

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How could a "stone" be worth £11M. What can you DO with it, that makes it so valuable?? :huh::huh:

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I found the whole thing very odd .. Surely it's just very very simple fraud ? Both by the company (but one suspects only certain directors of the company) assisted by the bank .. Years ago I had to list and value my buisness assets .. For most of it it was pretty simple depreciation calculations .. but for one asset the value had been rising in the last few years and it was worth more then (1998) than it originally sold for in 1976 when it was new .. (given the quantity of inflation over the time it was not that crazy!). I had to get a valuation from a reputable source and I had to show some recent transactions at or near that price. The bank checked all of this very very carefully and phoned and checked all the parties supplying information.

I assume that the person responsible for checking the valuations for the bank will be arrested along with the companies directors for fraud? I just can't see why the bank would lend to such an organization.

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