Investigations into the collapse of Wrekin Construction – forever remembered for its links with a mystery 4.4lb ruby – has uncovered sham invoices for services never provided.

Two ex-directors of the company, David Unwin and Nicholas Ibbotson, have been banned after using the ruby known as the ‘Gem of Tanzania’ to prop up the accounts, after it was falsely valued at £11 million but in fact sold for £8,000.

But Insolvency Service investigations have now shown that was not the end of the story, as they uncovered sham invoices for sales to another of Mr Unwin’s companies in the run-up to Wrekin’s collapse in 2009.

Mr Unwin, from Widnes, and Mr Ibbotson, from Sutton Coldfield, have been banned as directors for ten and seven years respectively, after a third director, Peter Greenwood, was disqualified in 2011.

The Insolvency Service said Mr Unwin caused Wrekin to make “substantial payments” including £768,177 to Britannia Management Services, supposedly with the intention that it would pay HM Revenue & Customs on Wrekin’s, but the money was transferred to other companies he controlled.

Mr Unwin also caused Wrekin to sell some machinery and equipment to another of his companies, Equatrek (UK), and a month later to buy them back for £749,000 more than the sale price.

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.”

The Post revealed in 2009 that Wrekin had been using the ruby to prop up it accounts before its collapse.

The year before it had a turnover of more than £100 million, but had a deficit on its accounts of £7.6 million.

Mr Unwin caused another of his companies, Tamar Group, to transfer the gem in return for shares and while at the time as worth £300,000, when it was transferred to Wrekin’s accounts in December 2007 it was shown as being worth £11 million – meaning a surplus rather than a deficit.

When administrators tried to sell the gem they found the document stating its value as £11 million was a forgery. Eventually the ruby was sold for £8,000 – to Pertemps founder Tim Watts.

The Insolvency Service said that in the weeks before the ruby was transferred to Wrekin, Mr Unwin acknowledged there were uncertainties over its value in a meeting with the firm’s former auditors.

Mr Ibbotson, Wrekin’s finance director, was aware of those uncertainties but still told Wrekin’s new auditors that £11m was the ruby’s genuine market value, the Insolvency Service said.

He and Mr Greenwood, Wrekin’s managing director who was disqualified from being a director for nine years in 2011, approved the company’s accounts to December 31, 2007, which included the £11 million valuation, without checking the reliability or authenticity of the Italian valuation report, the watchdog said.