Page 27 - How Not To Cook The Books Article
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Why Was The Gem Not Revalued?
Surely it would not have cost that much to have sent the gem to the
Instituto Gemmologico to revalue. This could have been done by Unwin,
RBS or the Auditors – ambiguity solved.
Why Was The Gem not Sold?
Answer – the valuation was a fraud. The £11 million attributed value
was an exaggeration supported by bogus documentation.
On paper it looked good and formed the basis for acquiring ownership of
Wrekin Construction but it could never be crystallised into solid cash.
The company became a more creditworthy partner for suppliers,
customers and its bank, RBS. Therefore, its value lay only in its ability,
as an entry in the accounts, to colour financial strength and allow easier
access to fund raising.
The gem itself has still not been proven one way or the other to be
valueless.
Accounts Issues
A number of issues are associated with the manipulation of the Gem in
the accounts:
First, was it reasonable to suppose that the Gem Fraud would go
undetected? The answer is No!
When Unwin produced a certificate of valuation, assumed to be genuine
and the gem was listed as an asset it transformed the fortunes of the
company.
The value of the gem would however, have been constantly questioned.
It was too unique an asset.
