Rubies are a Girl’s Best Friend

£11 million?

Well a property developers best friend in any case. In what has to be the most entertaining story so far this year, (and we are having a bumber year – see the Yellowstone Residence club debacle) the star of the story is an £11 million Ruby. No ordinary Ruby this apparently.

The Story – Shropshire based “Wrekin Construction,” and if you are wondering – that is pronounced “reekin,” not “reckin,” went into liquidation this month. According to the joint managing director, Peter Greenwood, largely thanks to the “unhelpfulness,” of their bank, Royal Bank of Scotland a.k.a. the British Government. According to Mr. Greenwood:

someone should be shot…I wouldn’t have let one of them so much as wash my car never mind run a bank.

Now, whilst I have a certain amount of empathy with that statement, it turns out that things were not quite that simple. Back in 2007, the company was on the verge of collapse, and then owner David Unwin had one of his other companies, Tamar Group, sell Wrekin construction a Ruby called “The Gem of Tanzania,” in exchange for £11 million of preference shares, instantly changing the company’s balance sheet from showing net liabilities to £6 million in net assets.  This apparently pleased RBS so much that they instantly extended a £4.25 million overdraft facility, secure in the knowledge that the company was on a sound footing.

This is where it gets entertaining. Ignoring the fact that if it should turn out to be miraculously worth £11 million, this would be four times more valuable than any other Ruby ever sold at auction by Christies and making it one of the most valuable gems in existence..

It turns out that the gem was supposedly “valued,” by the Instituto Gemmologica Italiano (IGI) in Valenza. 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 based in Valenza, Italy, on 31 August 2007.”

Any one who has ever traveled to Italy will be aware that you are not getting anything done in August, and IGI has subsequently said it was closed on the date of the claimed valuation – in any case, they do not offer valuations, only quality checks.

A swift look at the books of Tamar group shows the gem was valued at a paltry £300,000 in 2006. The accountancy firm that signed off on the valuation, Ashgates,  declined to comment. Meanwhile, the Ruby in question seems to have vanished and the adminstrators, along with the creditors are still looking for it. Good luck with that.

Even more entertaining is the fact that Wrekin’s PR man has resigned after not being paid and the recently revamped company website now sports the message:

Jackson Bird have worked on design and communication projects with Wrekin Construction for many years and recently revised their website. As Wrekin Construction are in administration and the invoice for the website remains unpaid we have decided to withdraw the site. Wrekin website.