"Gem of Tanzania -- Do Not Throw Out"

A small construction company in Shropshire called Wrekin Construction went bust last week. When it did, Royal Bank of Scotland, one of the UK's big nationalized banks, came in for some criticism for having granted Wrekin a £4.25 million overdraft before it went bankrupt.

But this is something more than the usual bad-loan-to-now-bankrupt-construction-company story. It now turns out that a couple of years ago, Wrekin apparently swapped a ruby called "The Gem of Tanzania" from a shareholder group called the Tamar Group for £11 million in Wrekin stock. With the ruby on its books, it suddenly had a much improved balance sheet, which helped it stay in business. Moreover, the £11 million in stock gave Tamar Group control of Wrekin. The Royal Bank of Scotland has not said whether took the ruby into account when it granted the overdraft.

No one outside the company has seen the ruby, and the directors of Tamar and of Wrekin refuse to comment. Various ruby experts have said that they had never heard of a ruby of that value, which is many times more than the record sale price of any ruby, the 8.62 carat Graff ruby sold by Christie's in 2006 for $3.6 million. None of the gem experts contacted by the FT had even heard of such a ruby. Some expressed doubts about its existence.

But now, the ruby has turned up for sale on eBay. From the description:

The most valuable ruby in the history of the world, ever! (allegedly)

Here we have for sale an item of unparalleled rarity. In fact it's so rare there are a lot of people who think it doesn't exist!

Ideal collateral for bank lending, helps boost your balance sheet it's a once in a lifetime offer and far better than any government backed lending plan (unless of course you're a bank that is).

Terms of Sale:-

Direct transfer to my off shore bank account in the Cayman Islands.

Sorry I won't take PayPal for this item, the fees would be eyewatering and I really don't fancy getting a chargeback a month or so later.

Payment in company stock or shares not acceptable (what do you think I am a Scottish banker or something?)

Jonathan Guthrie, columnist for the Financial Times, has written a piece on this as a Sherlock Holmes story. ( I include it within a cut as it sits behind a limited registration barrier. )

More stories in the Guardian, the Independent, and the Financial Times.