Page 27 - Articulate Files

Fake Ruby

Finance, Ethics

In March 2009 Wrekin

Construction went into

administration, with nearly
500 jobs losses. Its

management blamed Royal

Bank of Scotland (RBS) for its

predicament because the

bank would not extend credit
to cover its cash-flow

problems of some £2M. Wrekin claimed it had signed two
contracts worth a total of £50 million on the day it had been

taken into administration. However, the administrators

found, when examining the assets that the company's
owner, David Unwin, had entered an uncut ruby gemstone

valued at £11m, into the company accounts by exchanging it

for the shares. Unwin’s venture capitalist, business vehicle,

Tamar, had only recorded the gem in its accounts as an

asset valued at £300,000. But on transfer to Wrekin a false
valuation report gave it the £11m value. It also changed its

auditors.

Wrekin Construction, a private company, owned by the Frain
family had since 2000 experienced a turbulent economic

environment which had seen it at the time introduce

disastrous growth strategies which forced its collapse and
Unwin’s acquisition. The acquisition in 2007 however, saw

the economic climate go into a tail spin and company profits

plummet. The result was a second round of fraudulent acts