Building firm in administration - and blaming RBS

Alan_M_2

Clearly, once it's revealed that the entire business was supported on borrowing against an asset that may not exist, then it's a rather different story.

However this asset seems to have appeared at the very same time the takeover took place in 2007.

You've got to ask yourself, if this is as it appears (i.e. made up gem stone and false valuation) who is the more responsible.....the guy that came up with the idea or the bank for lending against it with checking......

I guess that's the exact reason why we're in the mess we're in right now.

I find this astonishing as throughout my life if I'd ever wanted any borrowing whatsoever I've always had to go through my entire personal finanaces with a fine tooth comb and prove everything to the last penny.

It seems as the sums get larger and the old school ties get more frequent, the necessity to prove anything seems to reduce.

Decadent_Fool

Alan_M wrote: »

David Unwin Jnr, managing director of Tamar Group, was available instead. He is the son of David Unwin Snr, ultimate owner of both Wrekin and Tamar.

I can see some jail time coming for the Unwin's! A tip for the two Davids; don't bend over to pick up 'The Gem of Tazmania' in the shower guys, you'll likely lose something a bit more valuable :rotfl:

Decadent_Fool

Oh, and I saw this as well:

http://www.shropshirestar.com/2009/03/13/probe-over-firms-finances/

JonnyBravo

A few days ago the gem was found and pictures published.
http://news.bbc.co.uk/1/hi/england/shropshire/7961956.stm

Tonight we had a further update on the "Gem of Tanzania" on Midlands news.



The valuation cerificate was a forgery (big surprise eh?)

Seems like it may be worthless.

Seems as if they're not sure where the forged valuation certificate came from. :rolleyes:
I'd imagine David J Unwin (Chairman of Wrekin) must be very miffed :rolleyes: as it was him who apparently moved it from another of his companies to Wrekin to allow more lending to happen.
It also seemed strange that he wasn't available for comment. :rolleyes:
I should imagine he is very cross that he has been hoodwinked by "someone" :rolleyes:
Very cross :rolleyes:
But I should imagine that his personal wealth is still assured so thats ok :mad:
I wonder if the "rotter" who pulled this trick will ever get charged

I'm going to keep my fingers crossed but it seems as if it's harder for the police to pin anything on anyone in these very large frauds....

Sol00

We'll never get out of this recession if banks don't start lending again!

fc123

Sol00 wrote: »

We'll never get out of this recession if banks don't start lending again!

Just as long as they don't secure the lending on big fat rubies...that then turn out to worth less than the valuation
Bizarre.
I hadn't seen this thread before.

Thrugelmir

BlondeHeadOn wrote: »

From here:

http://news.bbc.co.uk/1/hi/business/7935357.stm

"Shropshire-based Wrekin Construction Group has gone into administration, threatening up to 600 jobs.

The firm said it blamed Royal Bank of Scotland (RBS) for its predicament because the bank would not extend credit to cover cash-flow problems.
RBS did not immediately respond to calls for comment.
Wrekin, which also has bases in Yorkshire, Northamptonshire and Cheshire, said it had millions of pounds worth of orders.
Building workers' union Ucatt said that a healthy company was failing because banks would not lend.
"There is a particular problem with the banks bailed out by government cash not passing it on to construction companies. This must be the last example of this problem," said Alan Ritchie, general secretary of Ucatt.
Mark Pritchard, Conservative MP for the area the firm is based in, said Wrekin Construction had been forced into administration because of RBS's "inflexibility" in releasing funds. Wrekin also has subsidiaries in subsidiaries in Staffordshire and Scotland. "

Be interesting to get the full facts. Easy cop out to blame the banks. The management of companies like this are also receive large remuneration packages. They too have to accept responsibility for their decisions.

Mr_Mumble

Thrugelmir, read the posts above yours that deal with the £11m ruby fraud.
RBS did us all a favour by forcing Wrekin into administration. Thanks for quoting the OP, it shows what a bunch of rent-a-quote idiots union officials and politicians are!

Alan_M_2

Thrugelmir wrote: »

Be interesting to get the full facts. Easy cop out to blame the banks. The management of companies like this are also receive large remuneration packages. They too have to accept responsibility for their decisions.

In a nutshell the following happened:-

In 2007ish Wrekin Construction were bought by another business whose name escapes me.

Big hole in balance sheet was filled by "The Gem of Tanzania" along with a valuation from the Gemologico Instituto Italiano (GII) (I'm paraphrasing here). Wrekin Construction "Bought" this gem from the previous owner for £11 Million worth of preference shares.

RBS provided lending against said gem, it appears without any due dilligence whatsoever...i.e. does it exist and is it worth what it's said to be worth.

Poo hits the fan...loans are called in...collateral now required to settle position i.e. "The Gem of Tanzania".

It turns out the valuation was a fake (this will be spun as "Ambitious" so no one is charged with any kind of fraud)......in the accounts of the previous company the gem actually appears to have a real value of £300,000 or thereabouts.....

Lots of "No Comment" moments ensue........

Gem appears, looks like a red petrified poo and is clearly not worth a fraction of the estimated £11 Million.

So the real question here is.....who is actually more at fault for this situation?

1. The company/man who provided an £11 Million pound Ruby as collateral with a bogus valuation (i.e Fraud)

2. RBS for lending money on a "Gem" that no one had ever seen, and if it existed was worth 5 times the previous largest Ruby ever in existence......with no effort whatsoever to see if it was what it was purported to be.

I don't know about you, but whenever I've borrowed money from a bank I've had to provide hard irrefutable evidence of my entire assetts with penalty of being hung drawn and quartered if any of them weren't up to scratch.....

It seems as the numbers get bigger the requirement for Due Diligence seems to diminish.

Personally I feel both parties are equally liable, if one is prosecuted then so should the other, however, I don't think we'll see anything happen to anyone...it'll all get brushed under the carpet and the taxpayer bailout will cover the problem....but I'd be delighted to be wrong.

vivatifosi

Alan_M wrote: »

It seems as the numbers get bigger the requirement for Due Diligence seems to diminish.

Well said Alan M :T:T:T

Like you I run a small business and this has been one aspect of this recession that has been totally shocking. I can't believe the big companies are getting away with it. I don't understand why the pre-existing legislation and the new Companies Act which came fully into force last October aren't being used, with more of these being taken to task for their actions.