London tycoons lose billions in meltdown

The financial meltdown has cost London's tycoons billions.

Their losses will have a massive impact on the city's economy, forcing hundreds of shops, bars, hotels and restaurants to close.

Steel magnate Lakshmi Mittal was the biggest single loser after seeing £20 billion wiped off the fortune that made him Britain's richest man.

UK property tycoon Robert Tchenguiz is facing losses of up to £1 billion after borrowing heavily from Icelandic bank Kaupthing. Dozens of wealthy Russian and east European oligarchs with properties in London have also suffered huge falls in their fortunes, the Standard has learned.
City bonuses could be down as well this year— forecasters expect them to fall by £5 billion, almost 60 per cent, as banks cut back.

The loss of billions of pounds of spending power will also bring big falls at the top end of the property market. Mr Mittal, who owns some of London's finest homes including two in Kensington Palace Gardens, has seen the value of the shares he and his family hold crash from £33.24 billion in June this year to £11.82 billion today. Over the last four months he has lost the equivalent of nearly £180 million a day or some £7 million an hour.

The 58-year-old is head of the Arcelor Mittal steel empire, on the board at Goldman Sachs, and has a 20 per cent stake in Queens Park Rangers Football Club.

As well as seeing the value of his Arcelor Mittal shares plummet, Mr Mittal has made losses on his investment in RAB Capital, the hedge fund group which took a massive bet on the recovery of Northern Rock before it collapsed and was nationalised. He runs the steel business with son and heir Aditya and recently said: "Money is a curse."

The scale of the losses dwarf those of others in the top 10 victims of the financial crisis, including Newcastle United FC and Lillywhites owner Mike Ashley, Tottenham Hotspur investor Joe Lewis and Conservative Party treasurer Michael Spencer.

Mr Mittal is followed on the loser board by mining chiefs Vladimir Kim, of Kazakhmys, and Anil Agarwal, of Vedanta Resources. Both firms are recent listings on the London Stock Exchange but have seen their value tumble since the spring on the back of falling metal prices.

Mr Ashley is the fourth biggest loser from the crunch and has seen the value of his stake in Sports Direct, the retail giant he set up and floated on the London market, dive from £1.17 billion in February last year to just £168 million today. That is a loss of £1 billion.

Billionaire trader Mr Lewis, majority owner of Spurs, lost £602 million after the collapse of Bear Stearns.

Many of the Russian oligarchs who have done so much to push up London property prices in recent years are also said to be in trouble. Kirill Pisarev, chairman of London-listed property developer PIK and owner of a £15 million flat in Knightsbridge, has made a paper loss of more than $2 billion.

Alexander Lebedev, part owner of Aeroflot and organiser of an annual Hampton Court charity ball, has admitted that he has lost two thirds of his £1.7 billion fortune.

City bonuses are forecast by think tank CEBR to fall by more than half this year to their lowest level in a decade. The think tank expects the bonus pool to fall to just £3.55 billion, down 58 per cent from last year's £8.514 billion, and the lowest since 1998. It will fall again next year to £2.769 billion, says the CEBR.
The all-time peak was £8.8 billion in 2006, when more than 4,000 "masters of the universe" got more than £1 million. The fall in bonuses will have a huge impact on London's "bonus belt" ­— the line of wealthy neighbourhoods stretching from Islington to Wandsworth.