The most recent ICAEW disciplinary report read like a 90’s thriller, involving an uncut Ruby gemstone known as ‘the gem of Tanzania’ and a disgraced financial director.
Nicholas Ibbotson’s company, Wrekin Construction, acquired an uncut Ruby gemstone known as “the gem of Tanzania” in return for shares in the company. The gem was valuated at £11,000,000 by “an institute in Italy”. However, this valuation report was subsequently found to be a forgery.
Subsequently, the gem was sold for £8,000 by administrators after the company collapsed in 2009.
The gem was used to inflate Wrekin Construction’s asset value, plastering over the company’s insolvency. “Mr Ibbotson should have made more extensive efforts to confirm the valuation of the gem before its acquisition, especially given the significance of the valuation to the company which was substantially insolvent,” said the Institute in its conclusion.
He had attended a meeting before the financial statements were signed, where the auditors had advised of the need to appoint a lapidary to value the gem.
Ibbotson was excluded from membership and ordered to pay £5,000 in costs after the ICAEW said his actions as director in an unnamed firm demonstrated “that he was unfit to be a director of a company”.