Curse of the magazine cover hits Sam Bankman-Fried

At peak, FTX Founder and former CEO Sam Bankman-Fried's fortune stood at $26 billion.

Those whom the gods love die young. Those whom the magazines love go to jail.

Consider Sam Bankman-Fried. Just a few months ago he was on the cover of Fortune magazine accompanied by the epithet: “The Next Warren Buffett?” With his fortune plummeting from a peak of $26 billion to near zero and only a monstrous and unprecedented $250 million bail bond getting him out of prison for now, the question seems downright silly.

Bankman-Fried isn’t the only celebrity tycoon who’s found out that the covers of business magazines are the slippery slopes to doom.

In India there was the original Big Bull, Harshad Mehta.

(Photo by Soujanya Raj/Wikimedia Commons 4.0)

In the early 1990s, with India bathed in the warm glow of economic liberalization, Mehta became one of its first poster children. From there to magazine covers was a short journey made easier by his gleaming Lexus which peeped out proudly from behind his frame. The inside pages of the magazines celebrated his 15,000-sq ft home on Mumbai’s Worli Seaface with its billiards room and a nine-hole putting green. The honeymoon didn’t last long. By April 1992, the regulators and enforcement agencies were on to his scams. Mehta fell as rapidly as he had ascended and took down the Bombay Stock Exchange's (BSE) Sensitive Index with him.

Over the years, many other billionaires have reinforced this pattern of magazine covers followed by jail time.

Subrata Roy, the founder of the Sahara Group, appeared on business magazine covers in 2011 and by 2014 was cooling his heels in the clinker on charges of fraud. Nitin Sandesara, the owner of Sterling Biotech, was another tycoon to be featured on a magazine cover in 2016 only to be arrested in 2017 on charges of money laundering. Then there was celebrity jeweller Nirav Modi who had his tryst with magazine covers in 2013, only to be charged with fraud in 2018.

Elsewhere in the world too, there have been men who became media darlings briefly, only to face spectacular falls. Yasumitsu Shigeta, for instance, was a flamboyant Japanese billionaire who was worth $40 billion at the height of the dotcom boom. In 1999, Forbes magazine put him on its cover with the flattering headline “Japan’s New Face”. It was the kiss of death. His company Hikari Tsushin collapsed in March 2000, after a series of fraud allegations, and with its stock price plummeting, he lost his entire wealth.

Vijay Mallya was another tycoon who was once feted and lauded particularly when he launched Kingfisher Airlines with its super premium service. The king of good times, however, should have been warned. In 1992, one prescient business magazine put him on the cover with the question “Is Vijay Mallya broke?” It took another 20 years for that question to be answered with a resounding Yes.

His peer in the airline business, Naresh Goyal, too found out that making the news can often be a double-edged sword. In 2006, even the normally careful Guardian featured him as the “Indian high-flyer with the world on his radar”. His “elegant white stucco-fronted townhouse in a secluded road with sweeping views across Regent's Park” didn’t escape notice. Soon, enough Jet started jettisoning and he was back in the papers, this time as part of the invariable rise and fall stories.

But the hall of fame topper in this list is the late Jack Welch who was named “Manager of the Century,” by Fortune magazine in 2004 for his leadership of GE. Less than five years later, the company's lending business championed by Welch had brought the once mighty conglomerate to its knees. It took a while for the diagnostics to reveal Welch’s share of responsibility in the debacle.

But why blame the magazines. They have covers to sell. And what sells more than successful people. It is hard enough to find them and when they do manage to identify a few, it is only human to go overboard as Time magazine did in its 1999 cover titled “THE COMMITTEE TO SAVE THE WORLD” and featuring three faces that would haunt the world for years after that: Alan Greenspan, Robert Rubin and Lawrence Summers. They couldn’t stop the dotcom crash that befell the world less than a year later and unforgiving analysts say they may also have been responsible for another one that came calling eight years later.

No wonder that Princeton economist Paul Krugman once said: “whom the Gods would destroy would first put on the cover of BusinessWeek”.