Empire lost

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: The very wealthy are usually celebrated during their lifetimes and then quickly forgotten in death. In this, as in many other respects, Adolf Merckle was an exception.

Although he was ranked by Forbes magazine last year as the world’s 94th-richest person, with an empire worth some $9.2 billion, he was barely known outside Germany-and almost as little-known within it. Yet the secretive billionaire achieved a notoriety in death that he had avoided in life. On January 5th he killed himself by lying down on a railway track in front of a train as bankers were beginning to circle his family firm. They were threatening to dismember an empire that he had painstakingly built up over five decades.

Many in Germany saw the modest 74-year-old as a hapless victim of the credit crunch.

His family described him as “broken” and “helpless” in the face of the financial crisis.

Günther Oettinger, the premier of Mr Merckle’s home state of Baden-Württemberg, said he was “deeply shaken” by his death. In a report on the website of Spiegel, a respected news magazine, Mr Merckle was referred to as an “entrepreneur of the old school”.

Mr Merckle, however, also represented a buccaneering style of capitalism and appetite for risk that are at odds with what many see as the defining values of German business.

Mr Merckle’s financial woes seem to have arisen from bets he placed late last year that the share price of Volkswagen (VW), a carmaker, would fall, by selling shares that he did not own. In “short-selling” VW he was siding with mostly foreign hedge funds and engaging in a form of trading that is grudgingly accepted in America and Britain, but is still frowned upon in Germany.

When Porsche, a German carmaker with aspirations to take control of VW (and which las t week passed a 50% shareholding threshold), revealed that it had cornered the market in VW’s shares, short-sellers were thrashed. Mr Merckle is thought to have lost some euro 400m ($550m), an amount he had been trying to raise in recent weeks from a consortium of banks.

His empire was not felled by that loss alone. The deeper cause was that it was built almost entirely on debt. Some bankers reportedly think that VEM, the holding company for his family firm, owed as much as euro 5 billion. Much of this debt was incurred buying companies.