Mystery of bankrupt firm with ruby worth £11m

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The Independent Online

A construction company that went into administration with the loss of more than 300 jobs declared an £11m ruby as one of its assets, it has emerged.

Wrekin Construction was due £2m from government contracts, but owed more than £3.5m in VAT and tax bills when it collapsed last week, according to administrator Ernst & Young.

It now appears that the company listed the purchase of the precious stone, the "Gem of Tanzania", in its 2007 accounts. A note in the accounts said that Wrekin bought the ruby from owner Tamar Group for a "fair value" of £11m, paid in interest-bearing preference shares.

The note declares: "The fair value of the ruby gemstone was determined by a professional valuer [in] Italy, on 31 August 2007."

Investigators are believed to be struggling to find anyone who has actually seen the gem. Peter Greenwood, Wrekin's joint managing director, said the ruby was locked away in a safe deposit box, although he added that he had never seen it himself.

The auctioneers Christie's said the highest recorded price paid for a ruby was £2.6m, in 2006, according to the Financial Times.

Ernst & Young said it was "too early to comment" on the unusual asset or on reports that the gem revived the company's flagging balance sheet when it was bought.