Straight out of a cozy mystery novel this one.
Wrekin is a Shropshire-based construction company that collapsed last week - but that’s not the first time the business has experienced serious financial troubles.
Back in 2007, Wrekin was saved from bankruptcy by its then new-owner, David Unwin. Unwin had one of his other companies sell Wrekin a ruby called the ‘Star of Zanzibar’ or ‘Gem of Tanzania’, depending on which account you read, in exchange for £11m preference shares.
The transaction helped transform Wrekin’s balance sheet from £8m of liabilities mid-2007 to net assets of £6m at the end of the year. Solvency solved.
Cue last week’s trouble.
This time Wrekin was unable to emerge from financial crisis unscathed - the company went down, blaming creditors who froze their £4.25m overdraft facility at £2.8m, for its downfall.
Who are they you might ask?
One RBS. From Capital Chronicle:
The Royal Bank of Scotland car washers were at the time of this , erm, nil-cash asset infusion, described by David Unwin as “over the moon”. Overdraft facilities remained in place and Mr Greenwood spoke, with no irony, of achieving a “diamond result” in 2008.
Now the ruby is missing and Wrekin’s administrators Ernst & Young are trying to find it, as well they might. At an £11m valuation it’s the most expensive ruby on record, albeit on paper. The highest price actually paid for a ruby was £2.6m in 2006, according to Christie’s auction house.
So who was responsible for the rather lofty valuation of Wrekin’s ruby?
The valuation was said by Wrekin to have been made by a Valenza-based Gemmologico Italiano. Only, according to the Telegraph:
… Loridana Prosperi, a gemmologist at the Instituto’s head office in Milan, said: “That is impossible because we were on holiday on Aug 31, 2007.”
She also said that not only does IGI never assess the price of gemstones, only their quality, the office in Valenza does not even carry out that function. …
Curiouser and curiouser.
Related links:
Wrekin ruby saga - valuation jumped from £300,000 to £11m - Contract Journal
Hunt for £11 million ruby as owner goes under - Telegraph
