Sunday, March 15, 2009

Truth can be more bizarre than fiction

Hunt for £11 million ruby as Wrekin Construction goes under

The mysterious ruby - called the Star of Zanzibar - was bought by Shropshire-based Wrekin Construction. On paper, it is the most expensive ruby on record. But officials from Ernst & Young, the administrators called in to handle Wrekin's affairs, are now understood to be trying to establish why the gem was bought, and indeed whether it exists at all.

Posted by peter_2008 @ 07:54 PM (1004 views)
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4 thoughts on “Truth can be more bizarre than fiction

  • japanese uncle says:

    ‘The Star of Zanzibar’! Starting to sound like one might wish to call Mrs. Hudson’s at Baker Street.

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  • dohousescrashinthewoods says:

    Or ze great Hercule Poirot!

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  • If you read the article and the one in the contract journal Wrekin were technically insolvent in 2006 however Wrekin bought the sparkler 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. However the miraculous £11m gem was a new asset that helped to transform the appearance of Wrekin’s balance sheet from an £8m liability in March 2007 to net assets of £6m at the end of 2007 even though the only material difference was the £11m-worth of preference shares that had been issued.

    This sounds just like Quantatative Easing (printing money) without ever involving a bank but it will end up just being revealed as a rather clever fraud that remained hidden until the firm went bust.

    Unfortunately it looks like dodgy business and accountancy practices are rife from our blessed New Labour Government through the banks downwards to 2nd rate construction companies.

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  • I think this is one for Tin Tin myself.

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