Page 447 - The Case Lab Book

"The purchase of an uncut ruby gemstone by Wrekin (Construction)
was extraordinary and questionable.

"It is clear that the gemstone was included in the accounts to portray
Wrekin's financial position as a sound one, whereas its true position

was the exact opposite."

Unwin was also found to make sham payments of £768,177 and £516,959 from

Wrekin to two other companies controlled by him Britannia Management Services
and Equatrek (UK) knowing the construction firm was under severe financial
pressure and unable to pay its debts.

Mr Powar said transferring funds to connected companies at a time when Wrekin
Construction was insolvent and under severe financial pressure put the creditors at
increased risk:

"A business deal which involved the creation of a sham invoice ought
to have set alarm bells ringing for the directors and made them
question the appropriateness of the whole deal in the first place," he

said.

"Directors who recklessly present misleading information in this way

damage the confidence of companies to do business with each other
and undermine the business environment.”

Creative Accounting Comments
The Wrekin Ruby was not the only piece of creative accounting that the shyster
who owned Wrekin (for less than two years) used”

For example:

1 2
“Common accounting practice is to write off “Apparently in the last 12 months of
an asset in the books over a period of years. Wrekin's life over £2 million was taken out
Wrekin would write off, say, a JCB of the company by these kind of scams.
excavator over 4 years. At this point Wrekin's The reason I know this ?
owner would sell the JCB to a plant disposal I was an employee of Wrekin for many years
company he owned ( Equatrek) for £1. Three right up until their demise. The JCB scam