Britain's super-rich lose £54bn amid pandemic; Hindujas slip to second spot

Wednesday 20th May 2020 08:43 EDT
 

The Hinduja brothers, Sri and Gopi, have lost the top spot in the Sunday Times' UK Rich List to inventor Sir James Dyson. The Hindujas, however, remain the wealthiest Asians in the UK.

However, the coronavirus pandemic has wiped £54bn from the wealth of Britain's super-rich in the past two months, said the list compiler Robert Watts. He added, "Ever since the financial crisis of 2008-9, Britain's wealthiest people have become richer and richer.

Among the top three tycoon to see the fall in fortunes, two are Asians. The biggest fallers include the steel baron Lakshmi Mittal, the Hindujas and Ratcliffe. They have seen their valuations sink by between £3.9bn and £6bn since last year.

Around £15bn has evaporated from the pockets of Britain's 10 richest since March. Their plummeting fortunes, allied with sustained growth and strong profits in his own business, have propelled Sir James Dyson to top spot in the Rich List for the first time.

More than half of the country's billionaires, including Asians, are nursing losses as high as £6bn, with the combined wealth of the 1,000 wealthiest individuals and families plunging for the first time since 2009, in the wake of the financial crisis.

As with last year, the 2020 compilation of Britain's 1,000 wealthiest people comprises 85 entrants from ethnic minority backgrounds.

Despite their differing portfolios, there is one key similarity among several Asians who have amassed and preserved their fortunes - a willingness to keep their business empires in the family, often relying on their siblings and children to help them expand and upscale.

One such example is Mahmud Kamani, who set up the fast-fashion giant Boohoo in 2006 and four years later bought PrettyLittleThing, another online fashion retailer which was founded by his sons Umar, 32, Adam, 30, and Samir, 24 in 2012. As well as attracting the attention of various celebrities including Rita Ora, Miley Cyrus and Jessie J, the Boohoo group now employs nearly 2,200 staff and has a stock market value of £2.38bn, more than Marks & Spencer.

Meanwhile, Dragons' Den star Tej Lalvani started at his father Karter's Vitabiotics business in his late teens, driving forklifts and labelling boxes before ascending to his current role as a chief executive.

Muzahid Khan, founder of the Asian Business Leaders network, says this is an oft-used template. "The Asians millionaires and billionaires have realised that without their families, they cannot do it on their own," he said. "You could write a whole book about the contribution of the wives to these businesses, helping to manage all the family affairs. Then you get the kids coming into the business once they've graduated, coming in with their British education, expertise and knowledge, helping to create exponential growth in avenues their father has not been able to exploit."

Perhaps the most striking thing about the Asian contingent on the Rich List is how many refugees who arrived here with next to nothing are. Several fled conflict and despotic regimes to start a new life in Britain, including the billionaire financier Nadhmi Auchi, 82, who arrived in 1979 after two spells in Iraqi prisons where he was beaten and tortured, and the Bangladeshi seafood tycoon Iqbal Ahmed, who as a 14-year-old witnessed the massacre of nearly 100 Hindus during his nation's war of independence.

There are also many Indians who left Uganda on the list, fleeing the brutality of Idi Amin's rule in the 1970s. According to Khan, many arrived in Britain with an entrepreneurial spirit. "There were already several generations of immigrants taken to work in various industries away from their homeland," he said.

"Indians in East Africa," for example. "After they finished mining in the diamond shafts, they would get home and think, 'We need to have something for us and our families'. When these groups got expelled from places like Uganda and Kenya and came to the UK, they had already been entrepreneurs in a hostile and alien environment.”

Riches opt for furlough

Research shows that at least 63 Rich Listers — including 20 billionaires — have sought to furlough some of their staff under the taxpayer-backed scheme.

They include the Hinduja brothers, who have furloughed around 360 employees at Optare, their North Yorkshire-based bus-making firm. The Indian-born brothers topped last year's Rich List.

They include the Hinduja brothers, who have furloughed around 360 employees at Optare, their North Yorkshire-based bus-making firm. The Indian-born brothers topped last year's Rich List.

Sir Jim Ratcliffe, who topped the rankings in 2018, co-owns The Pig hotel chain which has furloughed most of its staff. Ratcliffe, worth £12.15bn this year, is also seeking an emergency loan from the government for Petroineos, a joint venture between his oil company Ineos and the Chinese state-owned PetroChina.

Three other entries in this year's Rich List top 10 have also used the furlough scheme, which allows workers to receive 80% of their salaries of up to £2,500 a month from the taxpayer. They are the Reuben brothers, Sir Leonard Blavatnik, and the Weston family, which owns Primark.

Glaring imbalance within ethnic groups

The first Rich List, published in 1989, had just five men from ethnic minorities among its ranks, so much has changed in the past three decades. The likes of Cornerstone and Impact X offer hope that there is further change to come.

The list argued that beneath this headline figure, there is a glaring imbalance - 81 of the non-white Rich Listers are Asian, while just four are black . Although the black, Asian and minority ethnic (BAME) acronym is often used as a sweeping, catch-all term, it is clear there are two distinct stories here; one of more established Asian wealth that has seen the likes of the Hinduja, Reuben and Mittal families dominate the top spots in the Rich List in recent years, and another involving emerging black entrepreneurs grappling with several systemic issues while trying to reach the elusive £120m threshold needed to make the cut.

In stark contrast to their Asian counterparts, black people make up less than 1% of this year's Rich List. The four entrants are Zimbabwe-born tech entrepreneur Valerie Moran, who with her Irish husband Noel is worth £200m; telecoms giant Mo Ibrahim, (£859m); five-time Formula One world champion Lewis Hamilton (£224m) and the former fund manager Sir Damon Buffini (£127m.)

While the Asian community can now draw on dozens of examples, representations of black British wealth are limited, a point further solidified by the fact that every black entry on this year's Young Rich List is a film star, athlete or musician.

Although the likes of Anthony Joshua, Raheem Sterling and Stormzy are cultural icons in their own right, the absence of young up-and-coming entrepreneurs to match their enormous strides points to some deep-rooted issues.

These days, the well-trodden route to creating a multimillion-pound business, is through venture capital investment. The problem is, most of the people signing off these sizable cheques are part of an elite club, dominated by white men.

ProjectDiane, a biennial demographic report on black female business founders in America, showed that in 2018, start-ups led by black women had attracted just 0.0006% of the $424.7bn tech venture capital raised in the country since 2009. In the UK, according to a report last year by JP Morgan, just 3% of the venture capitalists in London are black, while 86% are white. Check Warner, the CEO and co-founder of Diversity VC, a non-profit partnership, feels the investment world is "nepotistic and network-driven".

"We all know the old adage that it takes money to make money, and at the moment the set of people who have access to capital and investment is incredibly narrow and limited," she said.

Historically pitching to venture capitalists who do not look and sound like them, black businesses have largely struggled to secure the backing they need to take their ideas to the next level. However, the landscape is slowly changing, with a number of new investment funds looking to support them by providing monetary backing and mentorship and guidance. These include Cornerstone, founded by six friends who first met in a Levi Roots Caribbean restaurant in 2016.

In addition to investment, Cornerstone runs a nine-week "accelerator" programme once a year, inviting successful entrepreneurs to give its partners "open and honest" advice on how to grow their businesses.

Chenelle Ansah, the head of Cornerstone's Angel investment network, said: "What we're trying to do is break down barriers. The venture capital world and the investment space have historically been led by a particular group. Ultimately, our goal is to write cheques that help black businesses scale, so they can turn around and do what we are doing for others."

Alongside Cornerstone is Impact X Capital Partners, another black-owned and black-run venture capital firm putting money behind start-ups led by, or serving, women and people of colour.

As well as boasting support from the comedian Lenny Henry and Uber board member Ursula Burns, Impact X's 20-strong executive board features a group of highly successful black business people from the UK and US who offer expertise and advice.

According to co-founder and CEO Eric Collins, the group has already vetted more than 500 companies in the UK and Europe, investing in about 15 of them. "When we say 4 out of 1,000 people on the Rich List are black, that's only 0.4% of the total, so obviously, something's not happening," said Collins.

Many lose, some buck trend

The Issa brothers-Mohsin and Zuber- are among the Asians who have bucked the trend and added to their net worth.In March EG Group, the Blackburn forecourt operation co-founded by the Issa brothers, acquired the largest KFC franchise in the UK and Ireland. EG now has more than 5,200 petrol stations across eight countries. Mohsin, 48, and Zuber, 47, bought their first outlet in Bury in 2001, holding the position of group co-chief executive. Their Euro Garages business merged with European Forecourt Retail Group in 2016 to create EG.

Few people lost more money in the Indian stock market during the coronavirus-induced crash than the Hinduja brothers. One analysis suggested their listed businesses shed at least 67% of their value in March before rallying last month. The Hinduja Group is controlled by the sons of the late Parmanand, who set up in business in Mumbai in 1914, moving to Iran to trade carpets, tea and spices and later adding a merchant bank. Today the group has operations in oil and gas, IT, energy, media, banking, property and healthcare, but this year has been tough for London-based Gopi, 80, and Sri, 84, whose £300m home in Carlton House Terrace is a gemstone's throw from Buckingham Palace.

Also on the number two are the Reuben brothers were poised to take a 10% stake in Premier League football club Newcastle United as The Sunday Times Rich List went to press. The investment marks the first foray into football for the pair — but there has long been something of the magpie about their good eye for a shiny bauble in property and the metals trade. Born in Mumbai, the brothers grew up in north London and attended state schools. Simon, 78, left early and went into the carpet business, making enough money from a company he bought from the receivers to start investing in property. He made savvy choices, buying several shops in Walton Street and the King' Road in Chelsea.

At number 15 in the overall list and third in Asian, Anil Agarwal said earlier this year that he was determined to continue with plans to more than double his Indian oil production despite tumbling prices, as the country strives for energy self-sufficiency. In 2003 his Vedanta Resources was the first Indian company to float on the London stock exchange but he took it private two years ago, buying the rest of its shares for $1bn. Operating in India, Australia, Zambia and Ireland, mining copper, aluminium, lead and other metals, the business owns half of the separate and larger Vedanta Limited mining giant, valued at £3.44bn on the Mumbai stock market. Agarwal, 67, has a stake worth £1.72bn, down £2.18bn on a year ago.

The fourth richest Indian Laxmi Mittal is at number 19 in the UK Rich Lisht. Mittal described the deal for his first acquisition of a steel plant in India as a "homecoming". ArcelorMittal completed the takeover of Essar Steel's facility in Hazira in November. Mittal, 69, said: "I was born in India and my roots are in India. I have spent the past three decades building a steel business in multiple markets around the world." Already battered by the China-US trade war, lower steel prices and the higher cost of raw materials have set the share price sliding over the past year and the Luxembourg-based business is worth £7.974bn on the stock market. The Mittals' stake is valued at about £2.981bn, down £3.419bn in a year.

Prakash Lohia is at number 26. Lohia, brother-in-law of Lakshmi Mittal (qv), owns the Singapore-based Indorama Corp, one of the world's largest manufacturers of synthetic gloves. In 2017 it made just over $1bn profit on more than $8.4bn sales. In London, where he lives, Lohia is best known for his restoration of Sheridan House – a task that led to his nickname "the Maharajah of Mayfair". Lohia, 66, also has a huge collection of lithographs and rare books, which are being digitised and can be viewed at splrarebooks.com.

Tak Lee, at number 49, is approaching a 30% holding in Shaftesbury – at which point he could have another go at taking over the quoted property business, which owns London's Chinatown and Carnaby Street. His 26% stake is worth £709.8m, down £40.2m, and he has tried to block the re-election of the board over the past year. Tak Lee, 80, has seven children and owns homes in London and Hong Kong. We trim his worth to reflect Shaftesbury's share fall, but his dividends should have topped £13m in 2017-18. He has vast property assets in London, Hong Kong, Tokyo and Switzerland.

AT number 50 are SIR Anwar Pervaz and Family Pervez's London-based Bestway Group, which trades under the Bestway and Batleys brands, It is the UK's second largest independent wholesaler and third-largest retail pharmacy. It is also the biggest cement maker and second-largest private bank in his native Pakistan. However, political uncertainty in both his homeland and Britain hit the operation in 2017-18 and it is now worth £5bn, down £750m in a year, with the family's stake valued at £2.9bn. Pervez, 85, still chairs the business, where his sons Dawood, 45, and Rizwan, 52, are directors and his nephew Lord Choudrey (qv) is chief executive. He gave £263,000 to the Tories ahead of last December's general election and £5,000 to Labour, making him the only one of the top 50 political donors to favour the party.

ASIANS IN THE SUNDAY TIMES RICH LIST 2020

Rank 2019 (2018) NameWorth(▲)Rise/Fall(▼)Source of wealth

1= (1)Sri and Gopi Hinduja and family£16,000m▼ £6bnIndustry and finance

1= (2)David and Simon Reuben£16,000m▼ £2.664bnProperty and internet

3 (4)Anil Agarwal£8,500m▼ £2.07bnMining

4 (3)Lakshmi Mittal and family£6,781m▼ £3.888bnSteel

5 (5)Sri Prakash Lohia£3,605m▼ £1.797bnTextiles and plastics

6 (17)Mohsin and Zuber Issa£3,560m▲ £2.36bnFuel distribution

7 (6)Sir Anwar Pervez and family£3,102m▼ £432mCash and carry

8 (7)Samuel Tak Lee and family£2,850m▼ £155mProperty

9 (8)Simon, Bobby and Robin Arora£2,111m▼ £149mDiscount stores

10 (10)Lord Paul and family£1,900m▼ £100mIndustry

11 (15)Farhad Moshiri£1,875m▲ £300mInvestment and football

12 (14)Kiran Mazumdar-Shaw£1,808m▲ £119mPharmaceuticals

13 (13)Navin and Varsha Engineer£1,800m▲ £100mPharmaceuticals

14 (12)Lord Choudrey and family£1,531m▼ £224mCash and carry and pharmacies

15 (16)Raj, Tony and Harpal Matharu and family£1,300m▼ £21mProperty and hotels

16 (20)Surinder Arora and family£1,265m▲ £136mHotels

17 (11)Sunil Vaswani and family£1,250m▼ £719mTransport and food

18 (18)Nadhmi Auchi£1,182m▲ £6mFinance

19 (19)Mahmud Kamani and family£1,031m▼ £132mInternet retailing

20 (21)Jasminder Singh and family£1,015m▼ £85mHotels

21 (22)Christina Ong and family£878m▼ £172mRetailing and hotels

22 (23)Bhikhu and Vijay Patel£800mNo changePharmaceuticals

23 (25)The Jatania brothers£643mNo changeToiletries and property

24 (31)Sukhpal Singh Ahluwalia and family£600m▲ £100mCar parts and hotels

25 (26)Ranjit and Baljinder Boparan£593m▼ £47mFood

26 (24)Vladimir Kim£579m▼ £219mMining

27= (29=)Abdul Bhatti and family£540mNo changeCash and carry

27= (29=)Adalat and Arshad Chaudhary£540mNo changeCash and carry

29 (27)Younus Sheikh and family£532m▼ £77mCash and carry

30 (41)Bhupendra Kansagra and family£486m▲ £166m

31= (32=)Felix Grovit£450mNo changeForeign exchange

31= (32=)Meeta and Amit Patel£450mNo changePharmaceuticals

33 (38)Apurv Bagri and family£418m▲ £69mMetals

34 (34)Kuljinder Bahia and family£410m▼ £17mTravel

35 (35)Kartar and Tej Lalvani£401m▲ £11mHealth supplements

36 (42)Kelly Choi£389m▲ £82mFood

37 (37)Fakhruddin Suterwalla and family£373m▲ £6mFood

38 (49)Masao Asai£340m▲ £110mHedge fund

39 (40)Fitri Hay£325mNo changeOil and horseracing

40 (44)Sharan Pasricha£321m▲ £23m

41 (39)Tom Singh and family£310m▼ £30mFashion

42 (43)Firoz Kassam£300m▼ £5mHotels and property

43 (28)Tony Fernandes£262m▼ £325mAviation

44 (47)Bakir Cola and family£259m▲ £9mHotels

45 (52)Vipul Thakrar and family£225m▲ £11mFood

46 (54)Lord Alli£220m▲ £8mMedia and Fashion

47 (46)Sanjay Vadera and family£219m▼ £38mPerfume

48 (51)Moni Varma£218mNo changeFood

49 (63=)Kirti Patel and family£215m▲ £50mPharmaceuticals

50 (68)Chai Patel£212m▲ £58m

51 (58)Koolesh Shah and family£210m▲ £18mHotels

52 (57)Anwar and Yakub Patel£208m▲ £10mPharmacies

53 (55)Mayank Patel£205mNo changeForeign exchange

54= (53)Iqbal Ahmed and family£200m▼ £13mFood

54= (56)Ratheesan Yoganathan£200mNo changeTelecoms

56 (59)Nik and Monisha Kotecha and family£197m▲ £7mPharmaceuticals

57 (61)Amin Tejani and family£188m▲ £15mPaper products

58 (60)Tarsem Dhaliwal£178mNo changeFrozen food

59 (50)Kishore Lulla and family£177m▼ £43mMedia

60 (66)The Dhamecha family£171m▲ £11m

61 (62)Nick Dhandsa and family£170mNo changeCare homes

62 (63=)Lord Verjee£165mNo changeFinance and retailing

63 (65)Raj Sehgal and Sanjeev Mehan and family£163mNo changeFashion and property

64 (71)Raj Manak£159m▲ £22mConstruction

65= (69)Kirit and Meena Pathak£150mNo changeFood

65= (48)Rashid and Aziz Tayub and family£150m▼ £86mDiscount stores and property

67= (72=)Sir Anish Kapoor£137m▲ £2mArt

67= (36)Peter Simon and family£137m▼ £250mFashion

69= (72=)Lady Nina Bracewell-Smith and family£135mNo changeFootball and hotels

69= (70)Aran and Arvan Handa and family£135m▼ £5m

71 (75)Surinder Kandola£134m▲ £1mFood

72 (78=)Nandlal and Deep Valecha£133m▲ £7mGas services

73= (76=)Kaveh Alamouti£130mNo changeHedge fund

73= (76=)Nemir Kirdar£130mNo changeFinance

73= (New)Tony Deep Wouhra and family£130mNew entryFood

76 (New)Sukhinder and Rajbir Singh£127mNew entrySpirits

77= (78=)Hitesh and Dilesh Mehta£125m▼ £1mPerfume

77= (New)Firoz Tejani and family£125mNew entryForeign exchange

79 (81)Lord and Lady Popat and family£121mNo changeCare homes and hotels

80= (74)Nitin Sodha and family£120m▼ £14mPharmaceuticals

80= (New)Woon Wing Yip and family£120mNew entryCash and carry


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