Glencore IPO Pushes Ex-Fugitive Billionaire Marc Rich Out Of The Shadows

In the run-up to last week’s much-hyped IPO, commodities giant Glencore appeared to make a concerted effort to distance itself from its founder, the infamous one-time fugitive Marc Rich.  Glencore’s IPO prospectus ran 1,637 pages long, but the company’s original name — Marc Rich & Co — was mentioned just three times. A search for Rich’s name on the website of the newly-listed firm brings up zero results.

By Clare O’Connor

It’s no great shock that Glencore’s billionaire executives are keen to avoid association with Rich. He was famously charged with illegally trading oil with Iran during the 1980s hostage crisis, as well as evading more than $48 million in taxes. He fled to Switzerland in 1983 as a fugitive, and hasn’t returned to the U.S. since, despite being pardoned by then-president Bill Clinton in 2001. Marc Rich & Co was sold to management in 1994, changing its name to Glencore. Rich then went silent, and — given a lack of information and evidence — Forbes dropped him from our Forbes 400 rich list in 2010.

Rich’s one-time underlings at Glencore’s helm might not be thrilled to hear that the infamous trader’s name is set to hit headlines again, despite the IPO being done and dusted. Hollywood hitmakers Brian Grazer and Ron Howard of Imagine Entertainment plan to turn the Rich saga into a movie, based on the 2009 book by Swiss journalist Daniel Ammann, The King of Oil: The Secret Lives of Marc Rich. Ammann was granted 60 hours of face time with Rich, who hadn’t spoken to the press in almost 20 years. Imagine and Ammann haven’t finalized a deal but it is thought to be weeks away.

While Glencore has done its best to play down the Rich connection, the former fugitive was unable to resist giving his two cents prior to the IPO. Earlier this year, Rich sat down once again with Ammann for his first newspaper interview in decades, for Swiss weekly Die Weltwoche. The Q&A, conducted on the 10th anniversary of Clinton’s pardon, is excerpted and translated at the bottom of this post, courtesy of Ammann. In the interview, Rich says he’d have kept Glencore private if the choice was still his. To Ammann, that stance is wholly unsurprising.

“I write in my book that Rich became rich not least by buying oil from Iran and selling it to its arch-enemy Israel, and all parties involved knew about it,” Ammann told FORBES. “Such trades would not, and will not, be possible for a public company.”

Rich heaped praise on Glencore chief Ivan Glasenberg, who became a multi-billionaire when the firm went public, calling him “brilliant” — and adding that he plans to buy shares in Glencore. He also told Ammann that he made money overall on his investments with Madoff, and that — despite missing New York — he won’t return to the U.S., fearing federal agents will “come up with something else and attack [him] again.” The 76-year-old also made light of rumors that his health is failing, telling Ammann: “reports of my death are greatly exaggerated.”

Marc Rich…

…on Glencore:

Q: You sold your company in 1993 to the management, which renamed it to Glencore. Are your successors doing a good job?
A: Glencore is a very well managed company. It is the best company of the industry.

Q: What do you think of its CEO Ivan Glasenberg?
A: Ivan Glasenberg is a brilliant man. I hired him in 1984 as a Junior Trader. He worked in our coal department in South Africa. I liked him from the start.  He is intelligent, he is analyzing well, he is very hard working and he has an impressive presence. He is the strong man of the company, no doubt.

Q: Are the plans of Glencore to go public a good idea?
A: We will see.

Q: If Glasenberg asked you: ‘Marc, should we go public or not?’ What would you answer?
A: I would be positive, yes. They probably don’t have a choice. Transparency is requested today. It limits your activity, to be sure, but it’s just a new strategy to which they have to adapt to.

Q: If you were still the owner, would you go public?
A: I personally would rather not.

Q: Why not?
A: It is much more convenient not to be a public company. As a private company you don’t have to give information to the public. Secrecy is an important factor of success in the commodity business. We liked to remain closed and secret. It was a business advantage. Our business partners felt better that way too, I think.

Q: What are the motives of Glencore to go public?
A:  I basically see two reasons for a going public: Glencore gets access to more money. It is a way of funding your business and to finance growth. Plus: You have more liquid shares. It is easier to leave the company and redeem your shares. The going public may also be an exit strategy for the top management. It is always good to leave at good times.

Q: Will you buy shares?
A: Yes. The human resource at Glencore is fantastic.

Q: What an irony: You sell your company and many years later you buy its shares.
A: You see: I’m flexible.

…on Madoff:

Q: How was this scheme possible?
A: I was amazed, when I heard about it. I’m still surprised

Q: You were one of Madoff’s investors. Why did you trust him?
A: My business partner Alec Hackel went to New York once especially to visit him. Alec came back with a positive report and said Madoff gave a good impression. Then we invested. But about three months before Madoff’s scheme collapsed I got the feeling I should get out and we got out with everything.

Q: Why did you have this feeling?
A: I just had the feeling. I sent my advisors to see Madoff and to check on his business model. They came back and told me: ‘We don’t understand what’s happening. They don’t let us have enough information. It’s too good to be true.’ That was the signal to redeem our investment. Overall it was a good investment.

Q: You lost 10 to 15 million dollars to Madoff.
A: This loss stemmed from an indirect investment. Overall we made money.

Q: How much money did you invest before pulling out?
A: I was actively managing the portfolio, at times it was more, at times it was less. At the peak it was a high double digit million dollar investment.

Q: Did you sue Madoff?
A: No. What’s the sense?

Q: To get the money back.
A: There is no chance to get anything back.

Q: Why did experienced investors trust him?
A: He seemed to be very successful, he was Jewish, people felt comfortable with him. Greed may have played a role. Some people were blinded by a return of 30 percent.

…on his pardon:

Q: Exactly 10 years ago President Bill Clinton pardoned you. How did it impact your life?
A: It made me feel free. I can travel, I can move. Before the pardon I had to be very careful not to be caught by American agents. And I can assure you: I was very careful.

Q: The pardon was worth it?
A. Absolutely, why do you ask?

Q: In a way it backfired. You were back in the headlines very negatively – as the biggest tax fraudster in American history, as a traitor of the country who did business with Iran.
A: It didn’t bother me.

Q: Have you been back to the USA since the pardon?
A: No, and I don’t plan to.

Q: Why not?
A: I’m afraid they will come up with something else and attack me again.

Q: Would you like to go back to the USA?
A: If there wasn’t this problem I would like to go there, for sure. I miss New York. I like the country and I like the people. However, the U.S. political and legal system is prone to overreaction.

…on President Barack Obama:

Q: Two years ago you put great hopes in a President Barack Obama. Your assessment today?
A: George W. Bush was a very bad president. The Iraq war was a big mistake. The USA needed a political change. I hoped Barack Obama could be a good president, but I’m disappointed. He hasn’t done well.

Q: What should President Obama have done better?
A: Almost everything. He made too much empty promises that costed money and can’t be financed. The US can’t afford anymore to spend more than they earn.

…On his health:
“Reports of my death are greatly exaggerated.”


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