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Newly, old rich, tumble from billionaire ranks

A record number dropped from the ranks: 355 people from last year's list of 1,125 have lost the rights to use the billionaire title because of lower net worths.
Image: Mark Zuckerberg
Facebook founder and CEO Mark Zuckerberg was the world's youngest billionaire last year. This year he's simply a young multimillionaire.Paul Sakuma / AP file
/ Source: Forbes

Notable accomplishments have been common in Irish-born businessman Anthony O'Reilly's life. The former star rugby player became chief executive of Heinz at age 43 and expanded its sales from $900 million to $15 billion while at the helm. Also impressive: O'Reilly has spent more than a decade on our list of the world's billionaires for investments he's made in Ireland and around the world.

In the past 12 months, though, O'Reilly has been on a losing streak. Shares of his newspaper group, Independent News & Media, fell 90 percent under weight of heavy debts and declining readership. He poured $250 million into the crystal and fine china group Waterford Wedgwood only to see it collapse in January. The result is a fortune that is down by over $1 billion.

For the first time since 1997, O'Reilly isn't on our list of the world's billionaires. At least he's got good company. A record number dropped from the ranks: 355 people from last year's list of 1,125 have lost the rights to use the billionaire title because of lower net worths.

It's a diverse group with the drop-offs hailing from 40 countries. The U.S. leads with 125 drop-offs, including notable names like the 24-year-old Mark Zuckerberg. The youngest billionaire in the world last year is now simply a youthful multi-millionaire.

With 55 drop-offs, Russia shed the second most. Two-thirds of its 2008 billionaires have fallen from the ranks, including Kirill Pisarev and his partner Yuri Zhukov, two of last year's richest newcomers. The pair became billionaires after taking their Russian real estate firm PIK public in 2007. The company used borrowed money to grab land for development, a strategy that let them expand quickly but proved costly as the nation's red-hot real estate sector turned ice cold. The duo both fell from the billionaire ranks as PIK's stock tanked.

It's been a rough year for other real estate moguls. In total, 34 on last year's list dropped off. Indian Ramesh Chandra fell further than any other drop-off. Last year, he was worth $9.6 billion. This year, we peg his net worth at an estimated $500 million.

Chandra's net worth was undercut after India's slumping real estate market pummeled the value of his property firm Unitech. The company shares fell by half in a single October day because of rumors that the firm was near default.

The industry with the most drop-offs shouldn't come as a surprise: 53 in the finance industry who were billionaires last year are gone.

One of the highest-profile falls belongs to Allen Stanford. We estimated his fortune at $2 billion last year. Recent allegations have cast doubt on Stanford Financial Group's purported revenues and returns. In February, the Securities and Exchange Commission accused Stanford and other executives at his Stanford Financial Group of operating a multibillion-dollar fraud.

He's got bigger things to worry about than losing money. The SEC has only filed civil charges against Stanford at this point, but criminal ones could be coming.

Long-time members from the financial industry Sandy Weill and Hank Greenberg are also gone. Both have seen the companies that made them wealthy turn to the government for bailouts lately.

Weill, the mastermind behind insurance giant Travelers Group, received a chunk of Citigroup shares when Travelers combined with Citigroup predecessor Citicorp in 1998. Citigroup shares are down 95 percent in the past 12 months. Greenberg, former chief executive of AIG, owns over 60 million shares of the company. They're down 99 percent in the past year.

Still, life goes on for these former billionaires. In last year's billionaires package, David Ross toured readers around his 16th century country retreat, site of the opera enthusiast's 300-seat concert hall where he hosts annual summer productions. Ross is probably worth one-tenth what he was a year ago.

That won't stop the show. A rep for Grange Park Opera, Ross' partner in the summer productions, says he's fully committed for the next three or four years. This summer they're staging Norma and Rigoletto.