Second Wrekin ruby valuation claimed to be a forgery

Mar 26 2009 by Tom Scotney, Birmingham Post

The provenance of the ruby that provided an £11 million chunk of the finances of collapsed engineering firm Wrekin Construction is still unclear, after another valuation document was claimed to be forged.

The cricket ball-sized ruby, which was sold to Wrekin by Derbyshire firm Tamar Group in 2007, had buoyed up the fortunes of the Shropshire engineering company after it looked like collapsing.

But when the firm was finally taken into administration earlier this month, it emerged the Italian organisation that had supposedly valued the gem at £11 million had never actually seen it.

The ruby, known as the “Gem of Tanzania”, was bought by Tamar owner David Unwin in 2004 as part of a land deal. The land deal valued it at £300,000. It is unclear how it came to be valued at £11 million in the Wrekin accounts.

But the plot has thickened after an even earlier valuation – by London jeweller David Davis – claimed the jewel had a market value of $22-23 million. It has been suggested the valuation took into account the possibility of cutting up the uncut gem into a number of high-quality stones.

But Mr Davis said the valuation document must have been a forgery, because his own valuation had been handwritten, not typed. He could not confirm what the value of the gem was, saying it might have been around $22-23 million.

The ruby is now in the hands of administrators Ernst & Young, who are going through the assets of Wrekin Construction after it was taken under by its bank, RBS. The firm owed several million pounds in unpaid contracts to firms, as well as owing tax to the Government.

Hundreds of people at the firm’s site in Shifnal were made redundant by Ernst & Young 24 hours after the firm collapsed.

At the time there was a huge amount of anger directed at RBS for taking what appeared to be a successful company into administration. The firm claimed it had signed two contracts worth a total of £50 million on the day it had been taken into administration.

A majority share in Wrekin was owned by Mr Unwin, who had been a minority stakeholder until the transfer of the ruby, in exchange for £11 million worth of Wrekin shares.

Mr Unwin has always maintained that he had acted in good faith over the ruby and the financial dealings based on it.

A statement released by Mr Unwin’s solicitor, Derek Miller of Staffordshire-based Knights, said: “It is a source of deep regret and frustration to him that he was unable to complete the successful transformation of Wrekin by reason of a collapse in trading conditions which was unforeseen and beyond his control.”