Tycoon who couldn’t take it anyomore

LONDON: One evening Adolf Merckle, Germany’s fifth-richest man, opened the door of his modest home in Blaubeuren, Germany, and stepped out into the frigid air. The 74-year-old outdoorsman was keen on taking long walks to clear his head. But when he hadn’t returned home a few hours later, his family called the police.

Merckle had a lot on his mind. The secretive industrialist, who by our count had a net worth of $9.2 billion a year ago, was in financial straits. His holding company, VEM Group, had reportedly accumulated more than $6 billion in debt against its three biggest holdings: Phoenix Pharmahandel, the $28 billion (sales) pharmaceuticals manufacturer that had roots in a chemical company his grandfather founded in 1881; Ratiopharm, the generic drug maker Merckle had built from scratch; and cement producer HeidelbergCement. VEM was bleeding cash, and HeidelbergCement’s share price was falling at an alarming rate. It became harder to manage his debt payments.

Hoping to make some quick cash, Merckle began gambling on risky short positions. In October he bet against Volkswagen — and lost an estimated $500 million when the shares quadrupled after Porsche revealed that it had amassed a controlling stake in the carmaker.

A month later he approached German bureaucrats in Baden-Württemberg and begged them for a $200 million bridge loan in a bid to save Phoenix Pharmahandel and Ratiopharm. They turned him down. Talks with banks continued. In early January, his creditors gave him a $500 million loan. In exchange for the face-saving loan, he relinquished control of his empire. Trustees were appointed to oversee his assets.

Instead of taking a walk that cold night, Merckle drove to the suburb of Weiler, parked his car in the Ratiopharm lot and walked a few hundred yards to the train tracks that run past the plant. At 5:30 the conductor on an express train going from Ulm to Sigmaringen felt a bump and alerted authorities to investigate. Merckle’s mangled corpse was found two hours later. The note he left behind reportedly read, “I’m sorry.”

Like the rest of us, the richest people on the planet have endured a financial disaster. This year there are 793 people on our list of the World’s Billionaires, a 30 per cent decline from the 1,125 we counted up a year ago. Of the 752 who kept their ten-figure fortunes, 87 per cent saw their personal balance sheets falter (6 per cent gained; 7 per cent held steady). Today, the world’s billionaires have a collective net worth of $2.4 trillion, down $2 trillion from a year ago. Among the billionaires on both lists, the collective wealth is down $1.4 trillion.

Rich going poor

LONDON: The richest people in the world have gotten poorer, just like the rest of us. This year the world’s billionaires have an average net worth of $3 billion, down 23 per cent in 12 months. The world now has 793 billionaires, down from 1,125 a year ago. After slipping in recent years, the US is regaining its dominance as a repository of wealth. Americans account for 44 per cent of the money and 45 per cent of the list’s slots, up seven and three percentage points from last year, respectively. Bill Gates lost $18 billion but regained his title as the world’s richest man. Warren Buffett, last year’s no 1, saw his fortune decline $25 billion as shares of Berkshire Hathaway fell nearly 50 per cent in 12 months. Mexican telecom titan Carlos Slim Helú maintains his spot in the top three but lost $25 billion. — Agencies