Page 442 - The Case Lab Book

The administrators, Ernst and Young, acting on behalf of The Royal Bank of
Scotland found, when examining the assets of Wrekin Construction, that the

company's owner, David Unwin, had entered an uncut ruby gemstone weighing 2
kg (4.5lb) valued at £11m, and known as the Gem of Tanzania, into the company
accounts by exchanging it for the shares.

The exchange of the Gem of Tanzania (£11 million) was for interest bearing
preference shares. David Unwin until that point had held a minority share in
Wrekin.

Unwin had acquired the uncut gem in 2006 as part of a land deal involving his
Tamar Group Ltd and was then included in the Tamar accounts as an asset valued
at £300,000. It had earlier been sold to Trevor Michael Hart Jones, a South African

businessman, for £13,000 in 2002.

However, when it was transferred to the assets of Wrekin in December 2007 it was
given the £11m price tag, based on a valuation of four months earlier, purportedly

issued by the Instituto Gemmologico Italiano, giving the impression that Wrekin
Construction had a financial surplus of £6.3m while in reality it was insolvent.

The Instituto Gemmologico, Italy said it had never valued such a gem and
moreover on the 31st August 2007 when it was claimed it had done so, it was on
holiday and was closed. Furthermore, a laboratory manager said that the
institute does not assign values to gems, but only analyses their quality.

FRAIN FAMILY: Wrekin Construction Owners 1960 - 2007

When Tom Frain founded Wrekin Construction he named it after Shropshire’s
most famous hill and landmark – The Wrekin.

Wrekin was recognised by the industry for its pioneering change, combining
changing methods and technology with traditional values, business integrity and
skills development for over fifty years.

Tom Frain believed quality was the key to success and as such maintained a direct
labour workforce and as such was responsible for its taxation, National Insurance,