Bosses banned for £11m Wrekin ruby con

Aaron Morby 12 years ago
Share

Two former Wrekin Construction directors have been handed big bans for under-pinning the failing firm’s accounts with a ruby falsely valued at £11m.

David Unwin and Nicholas Ibbotson were banned as directors for 10 and seven years respectively, after it turned out the giant ruby was really worth just £8,000.

Their disqualifications follows a nine-year ban for a third Wrekin director Peter Greenwood for the same claim, following an investigation by the Insolvency Service.

Shropshire civil engineering contractor Wrekin Construction ran into trouble in 2007 when, despite turning over more than £100m, it suffered trading losses.

Unwin emerged as the contractor’s salvation in July 2007, buying Wrekin from its then owners.

At the end of that year another of his companies called Tamar transferred the ruby gemstone, known as ‘The Gem of Tanzania’, to Wrekin in return for shares.

The 2kg uncut gem had been bought by Unwin a year earlier and was valued as a £300,000 asset in Tamar’s accounts.

When the gem was transferred to Wrekin its book value suddenly soared to £11m, based on a supposed fresh valuation in Italy four months earlier.

Finally struggling Wrekin collapsed into administration in the spring of 2009, owing more than £45m to creditors.

When the administrators tried to sell the gem they found that the £11m valuation document was a forgery and eventually sold the gem for just £8,000.

The investigations by the Insolvency Service also found that in the weeks before the gem was transferred to Wrekin, Unwin admitted in a meeting with the company’s former auditors that there were uncertainties about the gem’s value.

Ibbotson, Wrekin’s finance director, was aware of those uncertainties, but nevertheless told Wrekin’s new auditors that £11m was a genuine market value.

Ibbotson and Wrekin’s Managing Director Greenwood approved Wrekin’s accounts to 31 December 2007, which included the gem without checking the reliability or authenticity of the Italian valuation report.

This gave the impression that Wrekin had a financial surplus of £6.3m, when it was really insolvent.

Unwin was also found to have made  sham payments of  £768,177 and £516,959 from Wrekin to two other companies controlled by him knowing the construction firm was under severe financial pressure and unable to pay its debts.

Pabitar Powar, Head of the Authorisations Team at the Insolvency Service, said: “The purchase of an uncut ruby gemstone by Wrekin 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.

“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.

“These bans are a warning to other directors who might act recklessly and without due regard to the interests of creditors, that the Insolvency Service will investigate and remove them from the business environment.”

Latest news

Balfour Beatty terminates Danny Sullivan labour deals

Around 500 workers on HS2 will be moved to alternative agencies or be taken on direct
20 hours ago

Trio face prosecution after Hinkley site death

Main contractors and client to face charges over death of site supervisor
21 hours ago

Buyers see recovery in house building sector

But civil and commercial work still in the doldrums
1 day ago

Apprentice saws-off thumb on hotel refurb site

Court hears how digit was reattached and teenager continued training with another firm
1 day ago

Laing O’Rourke tops June contracts league

£919m animal super lab dominates new orders
2 days ago

TSL turnover smashes £500m as profit almost trebles

Data centre and logistics contractor rises high on surging demand
2 days ago

Gleeson Homes chief exec leaves business after restructure

Management revamp after "challenging" year
2 days ago

Green light for 1,600-home Oldham town centre overhaul

Plans for over 1,600 homes across six regeneration sites approved
2 days ago

DSM wins Norwich city centre clearance job

Anglia Square shopping centre clearance for £300m scheme
2 days ago

13-year-old becomes UK’s youngest qualified digger driver

Grandson of Gallagher Group chairman sets industry record
2 days ago

Cubby reborn in £12m Svella-backed takeover

£50m revenue target set as 14 firms combine under new Cubby Group banner
3 days ago

North East NHS trusts plot £3bn health estate overhaul

Market engagement begins for major construction push across four trusts
3 days ago

HG goes green on cranes in £1.2m switch to battery power

Diesel-free crane drive cuts fuel bills by 94%
3 days ago

Developer fined £165,000 for fire safety failings

Firm ignored fire safety orders on apartment job in Preston
3 days ago

Bidding to start for £1.8bn North West framework

Contractors invited to bid for latest Procure Partnerships deal
3 days ago

Hill hits record £90m profit as homes pipeline swells

Build-to-rent push and £4.8bn contracting book to fuel next growth phase
3 days ago

Rayner unveils £39bn plan to build 300,000 social homes

Council building revival and rent reform feature in social and affordable homes plan
4 days ago

Keltbray bounces back with £3.2m profit

Tighter controls and smarter project selection fuel strong turnaround
4 days ago

VINCI JV wins 500-home twin town centre revamps

Chester Northgate phase 2 and Northwich Weaver Square schemes move to delivery stage
4 days ago

80 energy projects unlocked as Ofgem backs grid expansion

£24bn energy networks deal gets green light from regulator
4 days ago

How to see your stories on the Enquirer

Join our Suppliers and Buyers directory to get your news published
4 days ago

Henley lands Midland Mill revamp on Leeds tower scheme

Restoration of 18th-century mill kicks off on South Bank regeneration project
4 days ago

New boss at Eric Wright Civil Engineering

Gavin Hulme takes top job as Diane Bourne moves to group role
4 days ago

Pinewood submits £1bn data centre plan

Studio giant adds green and learning spaces to tech hub blueprint
5 days ago

Record results after TClarke goes private

Britain's biggest M&E contractor flourishes after de-listing
5 days ago

Dalkia lands £200m nuclear maintenance deal

1,000 nuclear FM staff to join M&E contractor
5 days ago

Construction comeback to outpace wider economy

Arcadis forecast fueled by spending review optimism
5 days ago

First steel goes up on giant car battery site

Severfield gets to work on McAlpine Somerset site
5 days ago

Permasteelisa wins cladding deal on Bovis city tower

Facade specialist lands package at 60 Gracechurch Street
5 days ago

Fox buys recycled asphalt specialist Fisher

Acquisition adds major recycled asphalt capacity in north west
5 days ago