Sometimes, having the face and the tenacious nature of a pit-bull terrier isn’t always an entirely miserable thing. Sometimes, doggedly following a trail which has grown so faint that it has almost disappeared isn’t entirely unrewarding. Sometimes, there’s another chapter to the story, an extra scene to the play…
And so it is in the case of the now infamous Wrekin Wruby; so come hither, settle down and gasp as the intriguing tale unfolds …. (and titter ye not!)
Act I, Scene I
March 2009: The Shropshire-based firm Wrekin Construction has gone into administration owing more than £3.5m in outstanding VAT and tax bills, despite a colossal ruby purportedly valued at £11m featuring in the company’s listed assets. A few miserable music-facers sit at their desks ready for questioning. Enter administrators Ernst & Young.
Ernst: Let’s ‘ave a look at yer books then.
Wrekin Construction: OK.
Act 1, Scene II
Ernst: Do my eyes deceive me or ‘ave you listed a ruby worth £11m quid in your assets?
Wrekin Construction: Yes.
Young: Where did it come from?
Wrekin Construction: It came from shareholder Tamar Group and we swapped it for “a fair value” of £11m paid in interest-bearing preference shares.
Ernst: Hmmm. That’s interesting. Can we see the ruby?
Wrekin Construction: We think it’s locked in a safety deposit box. No-one’s prepared to say they’ve actually seen it.
Young: Hmmm. Even more interesting. So who says it’s worth £11m quid?
Wrekin Construction: “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.”
Ernst: But that would make it the most expensive ruby in the history of gemstone sales; Christie’s are reported to have said the highest recorded price paid for a ruby was $3.6m (£2.6m) in 2006. Are you sure what you are telling us is correct?
David Unwin Jnr (managing director of Tamar Group, son of David Unwin Snr, ultimate owner of both Wrekin and Tamar) : “No comment”.
Act I, Scene III
Young: Hullo? Is that the Instituto Gemmologico Italiano (sic) based in Valenza, Italy?
Loridana Prosperi: (a gemologist at the head office of the Istituto Gemmologico Italiano in Milan): Yes.
Ernst: Can you confirm the assertion of Note 13 of Wrekin’s 2007 accounts that you saw this ruby on 31st August 2007 and valued it at £11m?
Loridana Prosperi: “That is impossible, because we were on holiday on August 31 2007.”
Young: OK, thank you very much.
Act II, Scene I
Young: People in charge of Wrekin’s accounts, can you tell us a bit more about The Gem of Tanzania and how it came to be in your possession?
Wrekin Construction: Um, err, umm, … One of the ruby’s previous owners seems to have been Trevor Michael Hart-Jones who bought the rock in 2002 for about £13,000 from Ideal Standards, a mining company in which he had a stake. Shortly afterwards a gemologist from the Southern Eastern African Mineral Centre valued the stone at $21.3m. Hart-Jones then brought the stone to London where a diamond setter and gem enthusiast by the name of David Davis provided an additional valuation of between $20m and $23m, apparently supported by a reference from Brian Dunn, senior valuer at the Crown Jewellers, Asprey & Garrard, in which Mr Dunn vouches for Mr Davis’s ‘high degree of competence’ in the subject.
Ernst: But we’ve checked with Mr Dunn and he says, “Davis is not a valuer but he has used my reference to support several huge valuations as if I support them, which I certainly don’t. I haven’t seen this ruby so I cannot value it but I would be very keen to.”
Wrekin Construction: Gulp!
Young: You still haven’t explained how so-called The Gem Of Tanzania ended up with you; pray continue…
Wrekin Construction: Honest, guv, this is all we know … Mr Hart-Jones lent the bauble to a ‘friend’ who then handed it together with five diamonds over to a ‘wealthy businessman’ who was interested in buying the ruby. Hart-Jones is quoted as saying “My friend took the stone and handed it over to him and that was the last I ever saw of it. My friend was conned. He lost his diamonds as well. He went to the police about the diamonds and they took it further and I believe the man is serving a jail sentence for stealing the five diamonds.”
Ernst: A likely story! Go on and make it a bit more plausible, will you? We’re not idiots you know!
Young: Would now be the right time to bring up The Goat Serum story?
Ernst: What?
Young: Hart-Jones – also notorious for a scam concerning Goat Serum.
Ernst: Huh? Really? Do you want to look it up?
Young: I already have – it was featured in a bit by the Daily Mail who had already put Mr Hart-Jones’ credibility under the Mail’s magnifying glass.
Ernst: Then let’s not bother here – anyone who wants to know more can always look it up on the internet.
Young: Yeh. Now back to you, you Wrekin Construction people! Explain yourselves! How did this so-called ruby end up on the books
Wrekin Construction: All we can tell you is that in 2006 the ruby was legitimately in the possession of a Cheshire property developer called Tony Howarth who seems to have sold the stone to David Unwin as part of a land deal in which the gem was valued at £300,000.
Young: And the next documented transaction is it being handed over from The Tamar Group in exchange for £11m-worth of preference shares in Wrekin Construction – is that right?
Wrekin Construction: It would appear so.
Young: Hmmmm…. I bet you hope that the other valuation certificate is legit then, don’t you? Don’t you hope that valuation certificate is legit Ernst? It’d look more than a bit awkward if it wasn’t, wouldn’t it Ernst? Hey-ho! We’d better hop to it and do some poking around and see if we can find out a bit more. Ready, Ernst?
Ernst: Yes. Of course. It’s my job. Don’t’ be so patronising.
Act II, Scene II:
Young: Aha! It appears that a typed valuation certificate for “The Gem of Tanzania” may be a forgery! We have shown David Davis the word-processed certificate and a photograph of the ruby; do you Wrekin Construction people know what he said? No, we thought not. Well, he said “I have no computer skills. I do not type and I could not put pictures in. That is not my signature, but it is a good copy.” All Mr Davis could confirm was that he had supplied a handwritten valuation, stating a replacement value purely for insurance purposes.
Ernst: Anyway, isn’t it about time we established that this fantastic jewel actually exists? Pull yer finger out, Wrekin-people, and find the key to the strongbox if you will be so good.
Wrekin Construction: OK.
Act III, Scene I, 7th April 2009
Young: Got that ruddy ruby?
Ernst: Yes.
Young: Let’s get it valued properly then.
Ernst: OK.
Act III, Scene II, 1st October 2009
Young: Oooer, Ernst, it looks like this Gem of Tanzania isn’t worth the desk-space it takes up as a paperweight. None of the reputable auction houses will touch it with a bargepole and it might be worth as little as £100.
Ernst: Really? I am surprised. Never mind, let’s see if we can flog it off as some powerful crystal – it may have some delusional powers, after all. See if you can shift it anyway and the proceeds from the sale will help to soothe the creditors’ woes.
Young: Google … Mystic Gems …. Ah, here we go; Rock’n’Gem Magazine – that might be a go-er – there’s loads of ads in the back for non-gem quality rocks that enthusiasts might be able to make into cabochon pendants…or something similar.
Ernst: Just the job! Book an advert my good fellow and I’ll get an auction arranged with the utmost alacrity. We’ll soon see the back of this thing. Make sure you put an advert in Colored Stone Magazine to lend a bit of credibility to the sale.
Young: Natch! Consider it done!
End of Play
{ 37 comments }
Anna a rollicking good read I was laughing till tears came. However I am stll amazed how a company carried this as an asset on its books with no questiong from accountants or auditors.
The funniest thing is that police are still ‘considering’ whether to launch an investigation – apparently forensic accountants are still picking through the paperwork to see if an investigation is warrented.
And we shouldn’t gloss over the not-so-small matter of interest-bearing preference shares – they must be pretty special things if they are issued in exchange for a 2kg uncut ruby said to be worth £11m.
It appears that preference-shares are different from ordinary shares in that they can be regarded as ‘hybrids of debt and equity’, offering a fixed dividend similar to interest payments and as such can provide considerable extra income. Moreover, because preference dividends are paid out of taxed corporate profits, they are classified as ‘franked investment income’, meaning there is no further standard rate tax to be paid on the income. Preference shares have to be paid before dividends on ordinary shares and – get this – preference shareholders have a higher priority if a company is liquidated! According to the Interactive Investor website, “Most investors don’t know that much about preference shares, but if it’s income you’re after, they are worth considering.”
Shouldn’t that be Wreckin’ Construction?
I think they might have got it the wrong way round. It’s the Shares that are worth £11 million, not the Ruby.
Personally, I can’t see anything wrong with handing over £11 million worth of shares for a bauble, if that’s what turns you on. A Thing is worth what you can get for it, as my old Granny used to say when trying to sell a tin of Spam during The War.
By the way, Gloria, how much are The Shares worth now? Don’t tell me, let me guess. A Hundred Quid?
Have I got to grips with this situation, or have I not.
Spot-on, Sabot, spot-on – it was the shares that were worth £11m quid. And the shares were juggled around under the same business umbrella so make of that what you will…
As to how much the shares are worth now, I have not a clue, despite learning that preference shareholders have a higher priority if a company is liquidated. Which is nice.
How much is a piece of paper worth?
Eleven million of nothing is nothing, as my old Granny also said, when our air raid shelter got hit with all those tins of Spam in it. Thank God.
On a slightly more serious note. This is obviously a Spam…..I mean Scam.
Am I right or am I right.
You may suggest it is a Spam – sorry Scam…. I couldn’t possibly comment!
As it turns out, the ruby isn’t even a ruby! Commenting on plans to advertise the pebble for sale in Rock’n'Gem magazine, Hatton Garden gem dealer Marcus McCallum said: “The Gem of Tanzania may not be worth the cost of the advert. A two-kg lump of anyolite is probably worth £1oo. A valuation of £11m would be utterly bonkers.”
I learn after a brief and superficial exploration of the internet that Anyolite is a metamorphic rock consisting of a granular mass of bright green chrome-zoisite, black tschermakite and corundum. So easy to mistake for a priceless gem, then…
Just to add irony to insult, it appears that Anyole is the Maasai word for GREEN!
(singing:) “Anyolite, anyolite, any, any, any o-li-ite…..”
The article is a good Spoof, Gloria. And a laugh when we all seriously need one.
I’d give them a hundred quid for it. But then I collect Paper Weights.
But I would like to know how they got away with it. I am of course, presuming that they raised loans on this bauble.
Are The Banks Mad? Need I ask.
According to Contract Journal (13.03.09) 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.”
Also, I found the following information on preference shares on a site called ‘Interactive Investor’ : “Preference shares are something of a hybrid. The offer a fixed dividend and are therefore always valued on a yield basis. They rank below bonds – but ahead of ordinary shares – in terms of the pecking order in liquidation. Most preference stocks are undated, although a few are repayable at the option of the issuer at some specified date in the future.
There are a couple of quirks in the system that make preference shares particularly attractive for income seekers. A number of preference shares are cumulative. This means that if the company misses a dividend payment on the preference share, this rolls up and the arrears must be paid off when the company resumes making preference dividend payments. More to the point perhaps, a company in this situation cannot pay a dividend on its ordinary shares until all preference dividend arrears have been paid off.
The second quirk in the system relates to the tax treatment of preference share dividends. Because preference dividends are paid out of taxed corporate profits, they are classified as ‘franked investment income’. This means there is no further standard rate tax to be paid on the income. ..”
So it seems that Wrekin’s balance sheet was transformed and there may have also have been some opportunity for extra income for those holding preference shares. Makes yer think, doesn’t it?…
Erm……..Those figures don’t add up, Gloria. I think. I could always be wrong I suppose.
Who owns the shares, by the way? Or is this an impertinant question?
http://www.contractjournal.com/Articles/2009/03/13/65814/wrekin-construction-empire-built-on-11m-ruby-gemstone.html
They aren’t my figures – Contract Journal’s figures
Who owns the shares? No idea!
Who owns the shares? I don’t think there would be any surprises when revealed.
Great piece, anna!
“Anyolite is a combination of Ruby within Zoisite and is also known as Ruby Zoisite.
Anyolite creates an altered state of consciousness, enabling you to reach and utilise talents and abilities of the mind.”
In other words…you can make stuff up.
Aha!
I thought this piece had a certain Smuddesque quality about it. Having revisited the top of the page I see it was indeed penned by Ms Smudd.
First class.
I just love it when suits get caught out. Even better when it’s twice with the same hit.
I doubt your face is as bad as you claim, but it would have to be pretty bloody bad to detract from that mind.
I fully understand it wasn’t written by ER.
AR
So now, Gloria, all you have to do is get those tenacious teeth into meat again and find out who got those shares. Who legally sold them (seems to have been an obvious move to me)?
Who eventually legally bought them, and who did they think they were buying them off? Any connections between those sellers and the directors you’re talking about?
Shake it like a terrier does when it’s got it’s teeth into meat.
Off you go Glo, get those teef out of the glass. You just need a likeable comedic sidekick. (just in case there are any TV programme producers reading).
In other words…you can make stuff up.
………….
Like spurious valuations you mean Saul? Or just New Age goobledygook?
In the interests of balance, Mr Unwin is said to be devastated that the valuations aren’t genuine and all his friends say that he is an innocent victim in the whole sorry affair.
Sir Henry: I’ll see if I can sniff out any of the information you’d like to see under my myopic scrutiny, but don’t hold yer breath – my chief investigative tool is merely the ‘search’ button ….
Now, like all real life experience stories, this also begins once a polly tito, and Happiness Stan, whose life evolved the ephemeral colour dreamy most, and his deep joy in this being the multicolour of the moon. Oh yes. His home a victoriana charibold, the four-wheel folloped ft-ft-ft out the back. Now, as eve on his deep approach, his eye on the moon. Alltime sometime deept joy of a full moon scintyladen dangly in the heavenly bode. But now only half! So, gathering all behind him the hintermost, he ploddy-ploddy forward into the deep complicadent fundermold of the forry to sort this one out.
Not that Mr Unwin, surely.
No doubt the Wrekin Wruby will be snapped up by some hundredaire collector to take pride of place between the horse bras, the jam jar full of Elgin marbles and the Minge vase on the mantelpiece, and a little of the ten quid thus garnered may find its way, via the trickle down effect, to the people who originally stumped up the cash for this fiasco in the first place. Meanwhile the actual beneficiaries of the scam will have disappeared quicker than a greased ferret lugeing down the north face of the Eiger. Yippee for shareholder democracy!
No, Saul. Not that Mr Unwin. But I like that Mr Unwin verybold.
As for the likeable comedic sidekick, I’d just like to warn any TV producers who may be reading that it would be necessary to film in very wide format.
And I’ve got a jar of Elgin Marbles on my mantlepiece. So there.
You will have to get your very best dusty archeologist attire out, crumpled Panama hat and obligatory wisecracking sidekick, and sniff out the truth.
I rather had Margaret Rutherford in mind .. part Miss Marple, part Madame Arquati … I’ll take Montgomery as the wisecracking sidekick, for sure.
nadgers – I think I read today that the Tamar Group is in trouble as well – oh dear, oh dear, oh dear. Shame about the Wruby.
I rather thought more of a Nick and Nora Charles.
Come on Asta, I’ll take you for a walk.
You do realise, Saul and Glo that it is very difficult not to say impossible for a normal non-English, non-Glo, non-Saul-soul to follow your conversation …
… but don’t let my observations stand in your your way of expression
’cause occasionally I “pick up” new words, expressions and even new thoughts ;-
Having said that: Good night to you et all
Ooh, you know just what to say to a wire-haired fox terrier, don’t you Saul!
(sorry Chatelaine, that won’t make much sense either)
Hysterical and not at all unusual. We have two clowns (man and wife) in our home town here in Devon. He three times bankrupt, she twice. Went bust again last month…but somehow forgot to stop withdrawing DDs from ‘customer’ bank accounts.
This week they opened up again. Same scam. No calls from the Trading Standards….it’s a police matter. (Rearrange sentence slightly for police view. And those lovely bankers? “Nothing we can do, squire”. It’s just so good to be back in Blighty again.
Ideal viewing for a rainy afternoon.
http://video.google.com/videoplay?docid=32441971690435022#docid=2974105452145119066
Just before I put my teeth in to soak for the weekend, I thought I’d just add one or two interesting snippets about Wrekin and its collapse:
From The Telegraph (11.03.09)
“RBS blamed for collapse of construction firm with loss of 500 jobs”
Royal Bank of Scotland, majority-owned by the taxpayer, has been blamed for causing the collapse of Wrekin, a construction company which has been forced to lay off more than 500 workers.
Wrekin Construction, based in Shropshire, collapsed into administration on Tuesday, after RBS issued a demand for a £2.8 million overdraft to be re-paid. Wrekin’s failure comes as a report suggests RBS is lending billions to foreign companies.
The bank is now just over 80 per cent owned by taxpayers after receiving more than £45 billion in direct funds and having £325 billion in toxic loans guaranteed. As a result, it has pledged to lend British businesses £16 billion this year. If RBS fails to lend the full amount by the end of the year, it will have to prove to the Treasury that this was because no borrowers applied for loans.
Wrekin’s joint managing director Peter Greenwood called the pledge “hollow” after he was forced to announce more than 500 job losses, should the company not be saved. However, the company has a £40 million order book this year, which was last night was boosted by a further £10 million after it won two new engineering contracts. He said: “It’s cash that we have run out of effectively and there has been a total lack of support from RBS. Today the bank has sent a formal demand that we repay our overdraft of £2.8 million. We cannot do that because it has frozen our accounts so the bank has appointed receivers. We have offered the bank shares in the business and the chairman David Unwin has offered to stand down but the bank is only intent on cash. The irony is we have £40 million of work secured this year and £4 million next year and an extra £1 million will be in the bank by the end of the week.”
He argued, by letting the company fail, it would cost the Treasury nearly £10 million over the next two years in lost tax and increased benefits payments. (…) It is understood that Wrekin’s problems stemmed from its suppliers putting pressure on the company to pay its bills.
/////////////////////////////
And from The Shropshire Star – 10.03.09 – background on Wrekin Construction….
“Originally a family-owned firm, the Wrekin Group and Wrekin Construction was acquired by David J Unwin (chairman), David G Unwin (director) and John Woodcock (joint managing director), in 2007, ending the 47 years of ownership by the Frain family. (…) By early 2007, the Frains were looking for a buyer. From a turnover of £100m in the financial year to March 31 2007, Wrekin suffered a pre-tax loss of £9m.
In stepped David Unwin, of the £50 million a year turnover Tamar Group, and although no precise details of the deal were released, it is understood he was was effectively given the group for free.
He immediately shovelled in £11m to cover the costs of mistakes made by the previous management team and by November 2007, interim results showed a profit of £1.2 million with forecasts of a £2.5 million profit in the full year. (…) Unwin said: “I’d known Wrekin for 20 years. At the start, I made an offer but Wrekin didn’t want to talk as it was in negotiations to sell to a small venture capital company and anyway Wrekin thought we weren’t big enough. So I asked what their net profit was and the answer was that they made a loss. When I told them we had access to £30m that made them prick up their ears.” (…)
////////////////////////
All very well, but no mention of a certain Gem of Tanzania anywhere …….
It also appears that the £50m/year turnoverTamar Group itself went into liquidation in July of this year.
Have I got this right glo? RBS turned down the offer of shares backed by a lump of ‘anyoldlite’ ?
Sheesh, no wonder RBS got in trouble turning down a (tarnished) golden opportunity like that!
I mean the tax payers could have ended up with an 80% interest in that lump of nothing…the ‘anyoldlite’ I mean, not RBS.
Just as a matter of interest, 1,700 people have now read this story….you’se a popular girl.
That’s what the report in The Telegraph says Anna – I can post a link if you like – but there’s no mention of a priceless ruby. The priceless ruby was ‘found’ listed as a company asset, the acquisition of which seems to have coincided with what the Shropshire Star (wonderful to find a report from a local paper) describes as David Unwin ‘shovelling in’ “£11m to cover the costs of mistakes made by the previous management team”. The priceless ruby was eventually identified as an “anyoldlite”, as you say.
Make of it all what you will.
Wrekin, Unwin, Ruby, Shares, a, is, up, down, or, was, in, on, the, and, if…….. Gosh I’m bored. Sweet dreams. xxx Thank you Anna R.
Comments on this entry are closed.