The mystery of the Gem of Tanzania''s £11m valuation

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May 14, 2008
Article from UK''s Mail on Sunday

The saga surrounding a 2kg purple rock called the Gem of Tanzania continues as many doubt its valuation at £11million.
The cricket ball-sized crystal, thought to be a ruby, had transformed, Wrekin Construction''s balance sheet though the injection of £11m in capital secured against the value.

As creditors reviewed the last full accounts at the end of 2007, they spotted something unusual. Unremarked at the time, Wrekin had turned a loss of £7.2m earlier that year into a surplus of almost £3m, a transformation explained under the column ''additions to investments''.

However, the claims are looking increasingly far-fetched after The Financial Times obtained information that casts doubt on the veracity of a 2004 certificate valuing the large uncut stone at $20million to $23million, about £11m at prevailing exchange rates.
It appears that the credentials of the UK valuer, which relied on a reference from an employee of Asprey & Garrard, the Queen''s jeweller, may have been forged.
The latest twist in one of the strangest accounting controversy of recent times was uncovered by Derek Miller, the solicitor of David Unwin, the owner of Wrekin, who had recapitalised the business using ''assets'' that turned out to be a ruby.
Mr Miller had the job of forwarding the stone to Ernst & Young, Wrekin''s administrator, allowing him to counter press speculation that it did not exist.

However, when he began checking out the 2004 valuation certificate, Mr Miller said he was dismayed to find that the competence of the valuer was disputed by a referee, a former Asprey & Garrard employee, Brian Dunn.

Mr Dunn told the FT that a reference he provided on Asprey & Garrard letterhead "was used for purposes for which it was never intended" and that the valuer, who is now retired, had a history of supplying over-optimistic valuations.

Mr Miller does not doubt that Mr Unwin believed he had bought a ruby potentially worth £11m if it could be cut successfully into smaller gems.

He said his client was ''very deflated'' by his discoveries.
Ernst & Young says it is looking into ''a number of issues which have already been identified'' but not specifically whether staff are checking drawers and waste paper bins for the elusive stone.

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