JAN 1 — Dozens of the world's wealthiest lost billions in recent months, but a few distinguish themselves for some of the biggest flops. It was a dreadful year for the world's wealthiest as markets and currencies around the world tumbled.
More than 300 of the 1,125 billionaires we tallied on our annual list last March have since lost at least US$1 billion (RM3.6 billion); several dozen lost more than US$5 billion. The 10 richest from our 2008 rankings dropped some US$150 billion of wealth, dragged down by steel tycoon Lakshmi Mittal, estranged brothers Mukesh and Anil Ambani and property baron K.P. Singh, who together dropped US$100 billion. America's 25 biggest billionaire losers of 2008 lost a combined US$167 billion.
But even in such an awful year, the stories of a few billionaires and now former billionaires stand out as particularly dreadful.
Take David Ross, one of Britain’s most successful entrepreneurs. Earlier last month, Ross notified four public companies in which he was a major shareholder and director that he had borrowed against his shares to fund real estate investments that had soured. He will likely have to sell some of those stakes to pay off his debts. So far he has resigned from three of the four boards and stepped down from his post as an Olympics adviser. His fortune, which we estimated at US$1.4 billion in March, is now worth about US$150 million.
Bjorgolfur Gudmundsson, former chairman and a large shareholder in Landsbanki, Iceland's second largest bank, saw the firm seized in October as the worst of the credit crisis tore through the island nation. The failure wiped out his US$1.1 billion fortune. He has since had to put his holding company, Hansa, into voluntary liquidation and is selling his British football team West Ham.
Russians were some of the biggest losers in the past year. Vladimir Lisin's Novolipetsk Iron and Steel is down three-fourths since its June peak. Dmitry Rybolovlev's fertiliser company, Uralkali, has fallen 90 per cent since it peaked around the same time.
But those losses pale compared with the troubles facing Oleg Deripaska. In March he was the world's ninth richest person and Russia's richest man, with a fortune we estimated to be worth US$28 billion. Since then Deripaska has been forced to sell shares in Canadian carmaker Magna International and German construction firm Hotchief, and had to borrow US$4.5 billion from a state-controlled bank to hold on to his stake in Norilsk Nickel. He will likely sell off additional assets to avoid losing even more of his fortune, now estimated at US$10 billion. Or less.
The biggest loser of all was Anil Ambani. Touted on the cover of our 2008 billionaires issue for having added US$24 billion to his fortune in one year, Ambani has dropped US$30 billion since then. But don't worry too much. His Reliance Entertainment is investing US$500 million in a new studio venture with Steven Spielberg's DreamWorks. Plus, he remains quite wealthy, worth US$12 billion That's something many others can't claim.
Billionaire Blowups, 2008
1. Anil Ambani
March net worth: US$42 billion
Current net worth: US$12 billion
The biggest billionaire gainer last March is now the year's biggest loser. Ambani lost US$30 billion in the past nine months, more than anyone in the world. Stock of his telecom company dropped after his estranged brother helped scuttle a deal with African telecom MTN. It's quite an achievement in a year in which three of his fellow countrymen — estranged brother Mukesh, steel tycoon Lakshmi Mittal and Indian KP Singh, all of whom ranked earlier among the world's 10 richest — lost more than US$20 billion apiece.
2. Oleg Deripaska
March net worth: US$28 billion
Current net worth: less than US$10 billion
Former metals trader survived Russia's gangster wars but may not withstand collapsing markets and heavy debts of at least US$14 billion. Russia's one-time richest man recently received a US$4.5 billion loan from a state-controlled bank in order to keep his 25 per cent stake in Norilsk Nickel, which faced a margin call by Western banks from which he had borrowed. Other margin calls forced him to divest a US$1.5 billion stake in Canadian carmaker Magna International and a US$500 million stake in German construction company Hotchief. He's also selling stake in insurance company Inogsstrakh.
3. Anurag Dikshit
March net worth: US$1.6 billion
Current net worth: US$1 billion
Dikshit designed the software for PartyGaming's successful PartyPoker game, which allowed live gambling over the web. He left the company and sold a chunk of shares in 2006, the year the US government banned gaming. He recently pleaded guilty to violating US gaming laws and agreed to forfeit US$300 million. He could face up to two years in jail but apparently won't be sentenced until 2010. He has already paid US$100 million of his fine and will pay the rest in two instalments next year.
4. Bjorgflur Gudmundsson
March net worth: US$1.1 billion
Current net worth: zero
The October collapse and government seizure of Iceland's second largest bank wiped out the US$1.1 billion fortune of Gudmundsson, the bank's chairman and biggest shareholder, along with his son Thor. His holding company, Hansa, has since gone into voluntary liquidation and is looking for a buyer for its British football team West Ham. It's not the first time he's run into trouble. A former shipping executive, he was charged with fraud and embezzlement in relation to the firm's 1985 collapse, and was eventually found guilty on five minor counts and sentenced to 12 months' probation.
5. Luis Portillo
March net worth: US$1.2 billion
Current net worth: US$15 million
Spain's short-lived real estate gold rush left one of its most visible speculators holding a nearly empty bag. Portillo — who acquired real estate firm Inmocaral three years ago, then led the takeover of the larger Inmobiliaria Colonial in 2006 — personally borrowed a reported US$1.4 billion from more than a dozen banks during boom times, using his stock as collateral. He resigned as chairman in December 2007 and then tried to sell his stake to a Dubai fund earlier this year. When the deal fell through, he had to sell most of shares to pay debts. — Forbes
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