The man who's losing a million dollars a minute

Among the biggest losers in Russia's financial crisis are the billionaire oligarchs who once helped to bankroll the Kremlin rulers. Now the tables are suddenly turned.

All filthy rich Russian oligarchs are alike. All filthy rich Russian oligarchs battered by the global financial crisis are filthy rich in their own way.

 

Take the man below, Valdimir Lisin, the boss of one of Russia’s biggest steel groups, Novolipetsk.

 

Russian oligarch Vladimir Lisin

 

 

Since you began reading this commentary, Lisin’s net worth has plummeted. By some estimates, he’s been losing a million dollars per minute for the past six weeks. That’s $16,667 a second. Altogether, Lisin’s seen 22 billion dollars pulverized from his portfolio in five months. That makes him the biggest casualty of Russia's financial upheaval to date.

 

And his plutocratic peers haven’t fared much better. Not far behind in the cash-crunch sweepstakes is Roman Abramovich, the owner of London’s Chelsea football club. He's lost 20 billion dollars - and is now reportedly worth a middling 5 billion.

 
And then there’s Russia's richest man, Oleg Deripaska, an aluminum magnate whose portfolio has shrunk by 16 billion dollars.

 

Altogether, the top 25 Russian billionaires on the Forbes rich-list have lost 230 billion dollars in five months. That’s about a quarter of the trillion dollars in value wiped off Russia's stock markets during its 61% freefall from its record heights back in May.

 

The market’s nosedive coincides with a host of other economic plagues that have hit Russia with a vengeance. Plunging oil prices – they dipped below $70 a barrel for the first time in more than a year on Thursday – pose a threat to the country’s petrol-driven economy. Elevated energy prices, in the view of many observers, have fueled Russia’s growing middle-class prosperity and enabled the country to flew its muscle on the world stage. So long as the economy hummed along, many Russians were willing to turn a blind eye to politics.

 

But now, inflation is on the rise, growth is being revised downward, and capital flight is raising eyebrows, especially in the wake of Russia’s war with Georgia in August.

 

But the biggest losers – in cash terms - are the ones who had the most to lose, the billionaire oligarchs. They built their empires by borrowing vast amounts from foreign creditors, and using their existing shareholdings as collateral. Now that those shares have swooned, the oligarchs are being forced to scramble for more cash to cover their obligations.

 

Of course, there’s a rich irony in all this.

 

It was the oligarchs who played the kingmaker's role in the fire-sale privatizations of the 1990s. They bankrolled Boris Yeltsin's re-election campaign in 1996.

 

Now they are going cap in hand to the Kremlin, which is pledging to loan the oligarchs 50 billion dollars to restructure their debts. According to reports, 35 companies and 20 banks have already made a request for Kremlin cash.

 

But at least one oligarch is reportedly making off like a bandit.

 

His name is Mikhail Prokhorov, another metals magnate. He bought up half the capital in one of Russia's leading investment banks, Renaissance Capital, for half a million bucks. That was just a quarter of its recent value.