Send us news by text, start your message World News and your send photos and videos to 80360
Widnes director banned after bogus £11m valuation of 'Tanzania ruby'
A WORTHLESS ruby valued at £11 million was sold for £8,000 after a Widnes businessman fraudulently inflated his company’s accounts.
David Unwin, aged 65, from Widnes, has been banned from being a director for the next decade after being found to have used the gem to falsely inflate his firm’s books.
The disqualification follows an investigation by the Insolvency Service who discovered that the so-called ‘Gem of Tanzania’ was just a 2kg lump of anyolite, a practically worthless grade of ruby.
Unwin bought the uncut gem in 2006 and transferred it to the assets of his Shropshire-based firm Wrekin Construction in 2007.
It was given a £11m price tag based on a valuation supposedly carried out in Italy.
Wrekin, a large civil engineering company, was founded in 1960. By 2007, its annual turnover was more than £100m but the firm incurred losses and had a deficit on its accounts of £7.6m.
Wrekin collapsed into administration in 2009 with losses of more than £45m.
By including the gem as an £11m asset in the 2007 accounts, Wrekin gave the impression that it had a financial surplus of £6.3m, when it was in fact insolvent.
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.
“Transferring funds to connected companies for no financial gain at a time when Wrekin was insolvent and under severe financial pressure clearly put the creditors at increased risk. Furthermore, 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.
“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.”
Comments are closed on this article.