Mystery £11m Wrekin ruby is tracked down

Administrators today confirmed they have taken possession of the mysterious £11 million Gem of Tanzania from collapsed Wrekin Construction.

The company, based at Shifnal, near Wolverhampton, went into administration two weeks ago with the loss of 420 jobs, blaming a lack of support from its bank RBS. But questions have since arisen surrounding the ownership of the ruby, which its balance sheet says is worth £11 million. Until today there was speculation over whether the Gem of Tanzania actually existed.

But a spokesman for administrators Ernst and Young said: "The administrators have today taken possession of the gemstone reported to be the Gem of Tanzania which will be retained in secure storage whilst they continue with enquiries.

"Until their enquires are complete they have no further comment."

In 2006Êthe gem's previous owner had recorded it as being worth £300,000.

The acquisition of the £11 million ruby revived the balance sheet of the firm after it was added as an asset in 2007, a year after the firm made a loss of £9 million.

In 2006, the precious stone belonged to Tamar Group, a vehicle of businessman David Unwin.

Tamar's 2006 books report a gem worth £300,000.

Mr Unwin took over Wrekin in 2007, when it issued £11 million in preference shares in return for the stone.

Wrekin's total assets, according to its 2007 accounts and including the £11 million ruby, were about £28 million.

Note 13 of Wrekin's 2007 accounts states: "The fair value of the ruby gemstone was determined by a professional valuer at the Instituto Gemmologico Italiano (sic) based in Valenza, Italy, on 31 August 2007."

But Loridana Prosperi, a gemmologist at the head office of the Istituto Gemmologico Italiano in Milan, said it is impossible, because "we were on holiday on August 31 2007".

Christie's, the auctioneers, have said the highest recorded price for a ruby was $3.6m (£2.6m) in 2006.

Wrekin had turnover of £103 million in the year to March 31 2007.

Its assets, aside from the gemstone, largely consist of property, plant and equipment.