Wealth is never permanent. One day you have it and the next, you don’t. The business industry has seen many names that rose to the pinnacle of riches or were either quite wealthy from the start, but due to one or the other reason, they became bankrupt.
Today, we are going to list down a few of such people who had to file for bankruptcy even after becoming billionaires.
1. Elizabeth Holmes:
The first to be on our list is Elizabeth Holmes, an American businesswoman who is known to be the founder of Theranos. In 2015, Forbes ranked Holmes as the youngest and richest billionaire in America. Her business venture was valued at a massive $9 billion. She also made a spot for herself in Time’s 100 Most Influential People’s List for the year 2015.
Holmes made huge profits; however, her fame took a massive hit when she was charged with fraud and deception. Holmes was accused of claiming to produce a revolutionary blood-testing technology that would produce reports regarding any disease and illnesses from just a drop of blood sample. Holmes claimed the technology would produce these results in mere minutes. However, her company was nowhere near to delivering this technology. Her organization went under Federal Investigations which was a huge blow to her integrity and wealth.
Consequentially, Forbes dropped her value to zero and she was tagged by Fortune as the ‘World’s Most Disappointing Leader.’
2. Eike Batista:
Eike Batista was one of the most prominent businessmen in Brazil during 2012. He was known to have a whopping US$30 billion of personal riches in 2011. Ranked as the seventh wealthiest man in the world and the richest in Brazil, Batista made a massive fortune through the oil and mining industry.
However, Eike Batista’s billion-dollar wealth started exhausting when his company could not meet the proposed production levels and investors started backing out. One other reason for his declining financial position was the deteriorating oil and mining industry in Brazil. The industry and crashed and so did Batista’s fortunes.
In 2013, Forbes stated that Batista lost approximately $20 billion in one year alone. In the next year, due to a constant decline in the value of his company’s shares and increasing debt, it was reported that his fortunes amounting to approximately US$200 million went into negative.
Three years forward, Batista was arrested in January 2017 by the Brazilian authorities for being involved in a significant money laundering case. The scandal took down Brazil’s most affluent politicians. The case was written down in history as ‘Operation Car Wash’ and involved US$100 million in money. It has a high-profile fraud case and Batista was sentenced 30 years in prison.
3. Bernard Madoff:
King of Ponzi Schemes, Bernie Madoff with his investment policy termed as ‘Split-strike conversion’ effectively defrauded numerous investors for billions of dollars. The strategy guaranteed a high and stable return to the customers, which he did manage through collecting all the investments in a single bank account. He is known to have scammed an amount of $17.5 billion from clients.
In 2008, due to the financial crisis and a failure to attract more investors, Madoff came under investigation by the authorities. Agencies unraveled a fraud of almost $64.8 billion. Executors have known to extract an amount of $13 billion of the swindled money. For more than 20 years, Madoff successfully cheated several investors. It was during 2008 when he was investigated and later, arrested. Currently, Bernard Madoff is serving a 150-year sentence in the federal prison.
4. Sean Quinn:
Once the richest man in Ireland, Sean Quinn had an approximate net worth of about US$6 billion during 2005. Through his holding business ‘Quinn Group’, Sean purchased shares in numerous multinational organizations which included Bupa Ireland and Anglo Irish Bank.
However, the financial crisis in 2008 had many wealthy businessmen file for bankruptcy and various companies were forced out of business. Sean Quinn and is heaps of personal wealth was also massively affected by the financial crisis as soon as it hit the Irish banking system. Much of the deficits in Quinn’s riches are ascribed to the severe losses suffered by the Anglo Irish Bank.
Quinn Insurance, one of Sean Quinn’s businesses, was charged an amount of US$3.6 million by Ireland’s Financial Regulator. The company was reported to have been issuing insider loans. During 2011, Quinn filed for bankruptcy due to numerous cases of liquidation litigation, corporate fines, and frauds.
5. Vijay Mallya
An ex-billionaire, Vijay Mallya rose to riches when at the young age of 28, he took over his father’s medium-scaled company and turned it into a multibillion-dollar company. He was known as the ‘King of Good Times’ and became India’s wealthiest liquor king. Mallya made a personal wealth of around US$1.5 billion. However, he is currently fighting a deportation case from the UK to India to face numerous charges of financial fraud. But how did Mallya’s financial situation suddenly change?
Mallya owned an airline company known as Kingfisher. Problems started when the debts on his airline company became unsurmountable. Consequentially, he was asked to step down as Chairman after losing controlling share in United Spirits. Mallya fled from India and took refuge in the UK when the millions of debts became hard to pay back.
6. Adolf Merckle:
Adolf Merckle bagged a lot of fortune when he expanded his small family business in Germany into a huge corporate giant with more than 100 companies and 100,000 employees. With a personal worth of around US$12.8 billion, Merckle became one of Germany’s richest people.
During the 2008 financial crisis, many businesses and investors were pushed into bankruptcy. Merckle also faced a severe loss of around US$3.6 billion. Even after facing this loss and tackling the financial crisis, Merckle still ranked as one of the five wealthiest men in Germany.
It was by the end of 2008 that things started going down the hill for Merckle. He suffered through a massive liquidity crisis in his investments in VEM and was had to cushion a loss of approximately US$6 billion. To cover up for these losses, Merckle made a few very dicey investments which proved fatal. These investments came out in losses and caused him to lose more money.
Unable to bear the burden of his massive losses, Adolf Merckle sadly ended his own life by pushing himself in front of a train.
7. Allen Stanford:
Currently serving a 110-year sentence in prison, Robert Allen Stanford is an ex-billionaire investor who chaired the company Stanford Financial Group. The company is now nonoperational. One of the companies in the Stanford Group, Stanford International Bank, reported to have around US$8.5 billion in assets.
Stanford was accused of massive financial fraud in 2009 after the US Securities and Exchange Commission initiated an investigation against him. He was indicted for fraud for illegally selling US$8 billion in high-yield certificates of deposit in a huge Ponzi scheme. Stanford was arrested in June 2009 for a series of charges which included money laundering and obstruction of justice among many others.
8. Huang Wenji:
Huang Wenji, the chairman of China Jicheng Holdings Ltd. which manufactured umbrellas, faced severe losses during a crash of the Hong Kong stock market. Wenji’s company had an approximate net value of $1.9 billion which was owned by Wenji and his wife with a 75% holding. In 2007, the value of the shares in China Jicheng Holdings dropped by 94% due to a crash in the small-cap Hong Kong shares market.
Today the company’s shares are worth nothing and Huang Wenji’s personal wealth has also been severely depleted.
The corporate world every year sees the rise of several successful businesspersons. They lead fruitful enterprises and become owners of mass fortunes. However, every year, the business world also witnesses the decline of the fortunes of many such billionaires. Few bad investment decisions and volatile share markets have resulted in many magnates losing their amassed wealth.