Editor’s note: This article was first published in July 2013, and the wealth and loss figures for Eike Batista and OGX are from that time. OGX filed for judicial recovery (bankruptcy protection) in October 2013; when this was written it had not yet done so. Eike Batista was later prosecuted in Brazil and in 2018 was convicted of bribery.
In just one year, Eike Batista has gone from being the seventh-richest man in the world to losing $2 million a day, with total losses of $30 billion in his fortune. He is now fighting for survival in a situation he never imagined could happen to him.
We are clearly talking about a businessman of the highest level, which shows that no one is safe from bankruptcy, however high they have climbed. It’s true that he may have been arrogant at many points, but it’s also true that, according to many Brazilians, he worked with an old-school capitalist mindset: the belief that the true capitalist is not the one who earns the most but the one who creates the most jobs. That said, Batista never hid the fact that his main dream was to become the richest man in the world and knock Carlos Slim off his throne.
His fortune comes from the EBX holding company, a group of six main companies covering practically all of Brazil’s natural resources and logistics. According to CNBC, the first $10 billion of losses could be put down to the slowdown in emerging economies.
In the letter he wrote to Valor International, Batista says he believes he made a serious mistake in the way he financed his companies. He regrets having turned to the financial markets (listing on the stock exchange):
If I could go back, I would not turn to the stock market to raise funding. I would have structured, privately held companies and would develop each of them for at least ten years. They would all be private companies until I was sure the time had come to take them public.
Batista says he is a very patriotic businessman, and that his investments are therefore patriotic too:
While I have been building my own fortune, I have also been bringing wealth into Brazil.
Batista is starting to be sued by lawyers for investors who say the collapse of OGX is now imminent. These lawsuits are trying to stop the Brazilian businessman from continuing to sell the company’s assets, and words like “fraudster” are beginning to be heard when people talk about him.
In his letter, the businessman explains that just two years ago OGX was worth $30 billion and that he has put more than $1 billion of his own money into it. He says that if he had wanted to deceive investors, he could have pocketed $5 billion and still kept control of OGX, which would not have been deception but his legitimate right as a business owner. He tells investors that the investor who has lost the most is himself, as it should be in these cases.
To the critics who call him a fraudster, Batista responds with emotional, motivating words:
I became an entrepreneur in 1980, when I ventured into the gold mines of the Amazon, with hostile surroundings, huge transport difficulties and outbreaks of malaria that forced me to replace crews of sick workers from one day to the next. I even came to question my path to success, given all the adversity I faced. But in the end, through perseverance, I became the owner of that mine and acquired many others. Eventually, I moved my entire business to Brazil.
I have never been talked about as much as in recent months, when I’ve been on the front pages of blogs, newspapers and magazines. I am 57 years old and, believe me, I still have a lot of energy and many projects in my head. I love my country, I believe in what I do, and I feed on the ability to dream and achieve new goals. Business is in my blood, in my DNA, and it is my inexhaustible source of energy and life. So all is not lost yet, and I will win back the confidence of investors.
Let’s hope so.
Further reading
Featured image: Ministério da Indústria, Comércio Exterior e Serviços, CC BY-SA 2.0, via Wikimedia Commons.
