Billionaires feel the pinch
By Luke Harding
FOR the handful of Moscow pensioners gathered beside Karl Marx’s statue on Sunday there was, at last, something to be cheerful about: Russia’s communists are these days a marginal and increasingly doddering force, but what the Soviet Union was unable to achieve in 70 years — the overthrow of global capitalism — is now happening, including in Russia.
The most prominent victim is Oleg Deripaska, until recently Russia’s richest man. In May his fortune, according to Forbes magazine, was $28.6bn. In April, Deripaska was bullish. His metals firm, Rusal, could soon float in either Hong Kong or London, he said.
Six months later, Deripaska has hit the new economic reality with a crunch. Like many Russian oligarchs, he aggressively expanded his business by borrowing billions against the value of his company’s assets. Since May, however, these have shrunk. Russia’s stock market has tanked — losing a whopping 71 per cent of its value.
Spooked foreign investors have fled, because of the global credit crisis but also because of the war in Georgia and the Kremlin’s interventions in the market.
On Monday, the Financial Times reported that Deripaska was trying to borrow $2bn, which he needs by the end of this month to repay part of a $4.5bn loan from western banks that he used to buy a 25 per cent stake in the world’s biggest nickel miner. Suddenly, Russia’s richest man is out of money.
It is, perhaps, too early to talk about the demise of Russia’s oligarchs or the return of communism. But experts agree that Russia’s super-rich have taken an unprecedented hit. In May, Russia boasted 87 billionaires — second only to the US. At least half were likely to lose their billionaire status in 2009, according to the editor of Forbes Russia, Maxim Kalushinky.
However, some of Russia’s fun-loving elite are insisting that all is well. Stands at next month’s Moscow millionaires’ fair, where you can pick up a jet or space-age piano, are all booked out.
Last week, however, the financial news agency Bloomberg estimated Russia’s top 25 individuals had collectively lost $230bn over the last five months — with Deripaska dropping $16bn.
— The Guardian, London


