The King of Oil: The Secret Lives of Marc Rich

persecution ledby U.S. prosecutors. He is sure that if it had not been for his legal case, Marc Rich + Co. would be even larger and more successful today—and Rich himself would have remained at the head of the company much longer. This surprisingly unemotional confession must sound like sweet—if somewhat late—satisfaction to the ears of federal prosecutors. They were never able to bring him to court, but their tactic of “taking away the water” had at least brought them a certain degree of success.
    “Marc had no choice,” one of Rich’s most important managers added, “and at the same time he realized that it was the right thing to do.” Even if the separation—which one trader described to me as a “shotgun divorce”—was forced, the future of his life’s work was still dear to his heart. It is perhaps the only explanation for why Rich was so generous to the same people who held the knife to his throat: The company’s new owners were allowed to pay off the price of Rich’s majority stake over the course of several years (it was, in effect, an interest-free loan). The deferred payments allowed them to generate the necessary capital for the management buyout with money earned during the normal course of business. They did not have to borrow any money or sell any of the company’s industrial facilities.
    The value of Marc Rich + Co. at that time was estimated at1 billion to1.5 billion. 6 The company was active in 128 countries, had an annual turnover of30 billion, and brought in an estimated profit of200 million to400 million each year. It was the market leader in the oil, metals, and minerals trade. As is the Swiss habit, the parties agreed to strict confidentiality regarding the final selling price. It’s time to disclose this secret here. Rich could have demanded much more for his stake in Marc Rich + Co. In the end he settled for the book value and set the price at480 million. “Marc sold cheap,” one of the buyers told me.
    He had two conditions, though. First, Rich didn’t want the management to quickly sell on the shares at a higher price to a third party. He could have done that himself. Second, a so-called postclosing adjustment was inserted into the contract. Should a subsequent revaluation of the assets (among them Ravenswood Aluminum Corporation) show thatthey were worth more than agreed in the contract, Rich would get additional compensation. Marc Rich found out a bit later that the new owners had secretly sold around 20 percent of the shares to Hoffmann–La Roche, the Swiss pharmaceutical giant. Furthermore, the assets were revalued to a higher value. Following an almost amicable dispute, Rich received an additional120 million. As several shareholders have unofficially confirmed, Rich came away with a total of600 million from the sale of his company. “Not far from the truth,” he said when I asked him to corroborate this sum.
    On Monday, November 7, 1994, Rich finally sold the last of his shares in the company that he had founded and stepped down from the administrative board. The name Marc Rich + Co., the name that had made history in the commodities trade for twenty years and continued to stir up so many negative associations, vanished from the scene. As soon as possible, so it seemed, the new owners renamed the company Glencore. Today, the company is still the world’s largest commodities trader, and in terms of annual turnover, it is the largest firm in Switzerland. No competitor, no former employee, no spin-out has managed to become bigger and more powerful than Glencore, formerly known as Marc Rich + Co. Nevertheless, there is not a single mention of Rich’s name on the company’s Web site—not even under the category “history.” He was purged.
Unlucky Comeback
     
    It seemed to be the end of an era for the King of Oil. “It would have been the perfect time for Marc to say to himself, ‘Now it’s time to retire and just enjoy life,’ ” a friend of Rich’s told me, but Marc Rich could not let go. Rich, who when asked about his passions always answers, “My work,” could not bear idleness. “I told him many times, ‘Just stop and make a nice life for yourself,’ ” Ursula Santo Domingo remembers. “He told me, ‘It has to go on. It has to go on.’ The fact that the telephone no longer rang only depressed him.” Not even two years had passed sincehis supposed exit from the commodities trade before Rich was back in the game. In the spring of 1996 he