What's in a name? For the late Jan Ludvick Hoch, better known as Robert Maxwell, the key to his fortune, it seems. The true state of the finances of his empire and personal wealth is slowly emerging. Evidence suggests that the level of debt is worse than the City had feared; that Hoch's empire is truly in hock. The Financial Times estimates total debt at between £1.75 and £2.2 billion.
Various chroniclers of personal wealth will have egg on their faces as a result. Blithely ignoring the debt mountain, many put him firmly in the billionaire category. In July 1991, four months before Maxwell's demise, Forbes, American business's bible, stated that "the balance sheet of the already public side of Maxwell's media empire, Maxwell Communication Corp plc, groans under debt-to-equity ratio of 130%". Despite that, the magazine gave Maxwell a personal net worth of "around $1.9 billion" (£1,100 million). In September, Fortune, Forbes' rival noted that the "gargantuan Maxwell was not one to avoid heavy gearing." Fortune still valued his personal assets at $1.8 billion (£1,094 million). The Sunday Times Top 200, published last April, estimating his worth at £1,200 million, gave Maxwell eighth place in its league table of the wealthy, stealthy and wise.
So who got it right? Nobody. Maxwell's elaborate financial dealings fooled everyone. The FT established that ultimate ownership of most of the family business had been transferred from Lichtenstein to Gibraltar, but that hasn't improved the visibility.
Mirror Group Newspapers, of which Maxwell owned 51%, is relatively stable. Unencumbered by borrowings and the Maxwell factor, the share price has risen from the dead. Maxwell Communications Corporation is another matter. With debts of $2.19 billion, analysts value it at zero or less. The 65% of MCC in family hands will hardly balance the accounts.
As for Maxwell's private empire, which includes the loss-making European and his latest addition to the portfolio, the New York Daily News, it's anyone's guess. The FT estimated debts of £750 million while sources consulted by The Sunday Times just after his death put the figure at £1.75 billion.
If there's one thing the pundits have to teach us, it's that speculation may lead to accumulation of a different sort. Put a minus sign before the guesstimates of Maxwell's true worth.