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The Sultan of Brunei was the world's richest man in the 1980s and 1990s, with a net wealth estimated at $38 billion in 1997 according to Forbes, age 51.

The Sultan and his brother the Prince Jefri Bolkiah are known throughout the world for their spending habits, palaces, hotels, yachts, airplanes, luxury cars...etc.

Until then, Brunei's 600 year old monarchy has survived their excesses, and with oil priced near $150 per barrel, the Sultan of Brunei is set to remain the world's wealthiest monarch ($22 billion in 2007) for years to come.

The Sultan of Brunei owns the world's largest residential palace with 1,788 rooms, the world's largest luxury car collection, a $250 million private Boeing 747 with gold plated toilets, a billion-dollar theme park, his brother was the world's most notorious playboy with a $500 million yacht, and most importantly, Hassanal Bolkiah inherited from his father a tiny Muslim country of 300,000 souls in Asia producing 200,000 barrels of oil daily.

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The Fairy Tale's Over for the Kingdom of Brunei

Forget anything you've read about the Sultan, his spendthrift brother, and those missing billions. If you don't, you'll never wrap your mind around the real story....

By Richard Behar

February 01, 1999

(Fortune Magazine) – I lit the $400 cigar, a "1492" from Cuba, and tried to imagine a life filled with boundless wealth--with 30 houses spread around the world, a mistress to go with my four wives, countless serfs and lackeys, plus a superyacht called Tits. The cigar was a gift from Prince Jefri Bolkiah of Brunei to one of his top advisers, who had urged me to smoke it. And why deny myself? An hour earlier, at the prince's heavily guarded London estate, I'd become the first journalist ever to interview the 44-year-old prodigal playboy, whose older brother, the Sultan of Brunei, was--until Bill Gates came along--the richest man on the planet.

Prince Jefri--"P.J." to his pals--had squeezed me into his schedule just hours before setting off for Brunei. His impending flight marked the end of five months of self-imposed exile and the beginning of a confrontation with the Sultan that would either restore order to the tiny monarchy or change it forever. The prince's advisers were begging P.J. not to board his jet. They feared his encounter with his brother (known in his circle as the "Big One," despite his small size) could lead to his imprisonment or even his death. But Jefri was optimistic. Besides, he was longing for a game of polo or badminton with the Sultan at the 1,788-room royal palace--a gilded, domed, art deco monstrosity, the world's largest private residence, bigger than the Vatican.

I inhaled slowly, trying to make the cigar last forever, and reflected on one of the strangest interviews of my career. Jefri had acted as though he'd just been exposed to some kind of cognitive kryptonite: words, gestures, facial expressions--he reduced all of them to gibberish. Now I understood the warning I'd gotten beforehand. "You'll never be the same" after meeting the Bolkiah brothers, one of P.J.'s aides had told me bluntly. "They don't have a lot of thoughts. Jefri is the brightest, but everything is relative. There's been a concerted effort to keep people like you away from people like them. And it's not because they're busy."

It may be true, as the saying goes, that absolute power corrupts absolutely. But throw absolute wealth--plus an unhealthy measure of inbreeding--into the mix, and the depravity gets downright entertaining. Officially Brunei is known as the "Abode of Peace." But insiders know it's not about peace. It's about oil--and money--flowing through the hands of a family so unhinged that they seem utterly incapable of managing it.

A Delaware-sized nation carved from the disease-ridden rain forests of Borneo, Brunei has pumped nearly two billion barrels of crude from the ground since Shell threw open the taps in the 1970s. The resulting wealth led to what's been dubbed the "Shellfare state": free health care, free education, and--thanks to an oil and gas sector that supplies 90% of the government's income--no personal income taxes. Brunei's $25,000 in per capita income is among the highest in Asia (although the true figure is doubtless much lower when you factor out the royals). More than half the working population is employed in the public sector, where they push paper for five hours a day. "I'm trying to think of a place that's duller," says Charles Arthur, an Australian-born writer who has spent the past six years in Brunei. "Maybe a British village in midwinter." But if life is a dull affair for the average Bruneian, the same can't be said of the folks pulling the strings behind the 600-year-old unbroken Malay dynasty. All that money has transformed the royal family into a Muslim version of the Beverly Hillbillies, complete with a fleet of private jets, a garageful of Rolls-Royces, and a weakness for their own first cousins. For decades, the House of Bolkiah has kept its proclivities hidden from its 300,000 subjects, who live without political parties or a free press. However, a rift between the three brothers who are fit enough to function--Hassanal (the Sultan), Jefri, and Mohamed--is threatening to part the curtain.

By most accounts, the view backstage is pretty bleak. Thanks to the Asian economic crisis, a collapse in oil prices, and decades of mindless spending, the Sultan has watched his fortune shrink by as much as half--from a high of roughly $40 billion just a few years ago, according to a well-placed source who claims to have seen financial records. Casting about for a villain, the royals woke up last summer to discover that since 1993, Jefri had been using funds from the government's main investment arm--the Brunei Investment Agency, where he had served as chairman--to make numerous private purchases, including such swank assets as Asprey of London, the "Queen's jeweler."

Jefri doesn't bother to deny dipping into the cookie jar and insists he was merely following a family tradition. Maybe so, but he now stands accused--if not yet formally--of squandering and even looting "billions" from the country's treasury. Government agents have seized as much as $2 billion of Jefri's domestic holdings, ranging from a cellular-phone system to an electric power station to one of the most expensive resorts ever constructed. And the dispute has erupted into a virtual holy war, with physical threats, private eyes, frozen bank accounts, sex scandals, and enough mud to slide the entire kingdom back into the jungle. In September, when I visited Brunei, more than 200 accountants and staffers from Arthur Andersen and KPMG were feasting on the wreckage.

The Brunei crisis, however, is more than a tale of unbridled spending. It is also a bizarre story--often veering into farce--about a decades-long rivalry among the three brothers, a feud that often seems more concerned with politics and the settling of old scores than with any actual financial crimes. As one of Jefri's aides explains it, "You're basically dealing with a little medieval kingdom, a little medieval court, which goes back to brother against brother, to the power struggles you've read about down the ages, whether in Florence or Venice or anywhere else. That's life. Times don't change."

Indeed, the Shakespearean plot lines are hard to miss. In 1968 the Sultan--then just 22--inherited the throne from his increasingly addled father, who'd been hustled into early retirement by his British overlords. Some years later Hassanal, the new Sultan, became smitten with an airline stewardess and decided to make her his second wife. (He, like his father before him, was already married to one of his first cousins.) The old Sultan was furious and until his death in 1986 refused to accept the commoner into the family. Mohamed, convinced he would have made a better ruler than his slightly older brother, had bitterly resented his father's choice of heir. Nevertheless, faced with Hassanal's affront to the family, Mohamed--a pious, conservative Muslim with only one wife--sided with the old man. Jefri--who enjoys four wives, the most allowed under Muslim law--cast his lot with the love-struck junior Sultan.

In the years that followed, Mohamed apparently grew jealous of Jefri's friendship with the Big One. The two drove sports cars and played polo and badminton together in Brunei, while away from home they indulged similar playboy appetites. Mohamed, in contrast, was short on fun and long on prayer. To make matters worse, in the mid-1980s he was also a prominent shareholder in two major corporations in Brunei that suddenly collapsed, causing the Sultan considerable embarrassment. The failures weren't Mohamed's fault, but P.J. seized the chance to make some political gains. "Jefri drove the needle fiercely into Mohamed and made him look worse in the eyes of the Sultan," admits one of Jefri's top advisers. Thus alienated from the throne, Mohamed stewed, awaiting his moment. It would be more than a decade before it came.

My assignment for Fortune was to find Jefri, who was reported to be "hiding" in either Paris or Switzerland following the meltdown back at home. (In fact, the prince and a female assistant were enjoying their weekends at St. John's Lodge, his London estate where we would eventually meet. For a change of scenery they were spending their weekdays secluded in a $5,000-per-night suite on the 51st floor of Manhattan's New York Palace hotel, which Jefri owns.) I was also, if possible, to trace the money trail. One business magazine had described Jefri's private empire as collapsing under $10 billion in "debts"; another publication spoke of $16 billion in "losses"; still another had Jefri absconding from Brunei with $8 billion. None of those reports appear to be true. But sorting fiction from fact--never mind getting sources to allow their names to be published--turns out to be next to impossible when writing about this murky monarchy, where the release of even incidental financial data can land a minister in prison.

Over two months I flew to three countries to meet top aides to Jefri, the Sultan, and Mohamed. (I even hooked up briefly with a private eye named John Quirk; for an account of how he tried to con me, see the following story.) My first stop was to see a team of Jefri's advisers at another of the prince's grand hotels, the Plaza Athenee, in Paris. Security outside the building was tight. In the hotel's courtyard and over fine food, red wine, and an endless supply of Cuban cigars, the advisers explained that I could never reveal their identities, that Jefri had never met with a reporter in his life, and that it was unlikely I would ever see him. One aide said his own family had been "threatened" by an adviser to the Sultan, who had demanded he abandon Jefri's cause. "These people won the biggest lottery in the world," said a second aide. "And they've managed to piss away more money than most men can dream of. Your story is how one of the world's biggest fortunes was spent in the shortest amount of time."

If they haven't quite pissed it all away, it hasn't been for lack of trying. In 1984, Brunei became completely independent of Great Britain; three years later, Fortune crowned the Sultan the richest man in the world. He and P.J. have been celebrating ever since. They bought 17 aircraft, plus 2,000 luxury cars, which they keep in a climate-controlled garage. (Until recently the Bolkiahs were the world's biggest purchasers of Rolls-Royces.) They each own a 152-foot yacht (Jefri gets perplexed and offended when anyone criticizes his decision to call his Tits). When traveling abroad, the Big One whizzes around in a 747 built to carry 420 people; one of his wives has been known to tag along in a jet that seats 150. Not long ago the Sultan gave one of his daughters an Airbus A340, in her favorite colors, for her 18th birthday. (Not surprisingly, the hair-shirted Mohamed flies commercial.)

Nor does it end there: The Sultan owns a Renoir that he bought in the mid-1980s for $70 million--then a world record for a painting. Jefri, meanwhile, once held the record for jewelry, with a $10 million necklace. Two years ago, when the Sultan turned 50, he threw himself a $17 million bash that featured three concerts by Michael Jackson; Guinness called it the most lavish birthday party ever held. Not to be outdone, Jefri is building the biggest private residence in Las Vegas--at 149,000 square feet. "With their money, they could have cured diseases," says one of Jefri's advisers. "But they have little interest in the rest of humanity. They make purchases for their own edification. They get their jollies for about 30 seconds at a shot."

And nothing jollies them up like a bit of sport. To learn golf, the royals once flew in Jack Nicklaus. When P.J. and the Big One feel like playing polo, they are fond of flying in the world's top players from Argentina. ("By a miracle, the Brunei team always won," recalls a visitor to a few rigged matches in 1997, adding that the surrealism was heightened by a public address system frozen on the Sultan's every move: His Majesty has the ball! His Majesty is running downfield with the ball! An amazing strike by His Majesty!) Similarly, when Jefri's son Hakeem wanted to learn football in 1994, the NFL's Joe Montana and Herschel Walker were given a seven-figure incentive to teach him. They realized they had their work cut out for them when Hakeem and his posse showed up in full football regalia, the young prince towing a valet assigned to tie his shoes. Hakeem, weighing in at about 300 pounds, also had a hard time catching the ball. Fortunately, no one dared tackle a member of the royal family, so he managed to take handoffs from his teammates, then waddle downfield for an easy touchdown.

When the Sultan and Jefri visit foreign cities, they take an army of butlers, cooks, confidants, playmates, and hangers-on. "Even the entourages have entourages," says one source close to the court. Records from one North American hotel in 1995 show the Sultan's party using more than 100 rooms in four days, racking up a bill that topped $1 million. Generally, the royals rent entire floors of hotels and don't venture downstairs until checkout day. "If you were a fly on the wall and heard their conversations, they'd take you to Bellevue," says one of the Prince's top aides, who has become increasingly cynical. Jefri himself stays regularly at his Palace hotel in New York City (he also owns the Bel-Air in Los Angeles), but he's never toured the property, let alone the city. Stores such as Versace and Armani have been known to set their entire inventory in a hotel function room, then wait to be called upstairs. "As long as there was adequate BSG--what I call begging, sniveling, and groveling--they would buy anything," says the aide. "If they liked a particular suit, they'd buy 100 at a clip, all in the same color. I could outfit entire countries with the clothing bought by the family."

All of which makes it pretty hard to swallow the party line now coming out of Brunei--namely, that Jefri lies at the root of the kingdom's troubles. As one of the Sultan's spokesmen in London took pains to explain to me, Brunei is a "happy country" with "prudent fiscal management" and "one of the most stable and vibrant economies." But Jefri, he said, his voice a cartoon of disapproval, is "a man whose lifestyle has proved to be rapacious."

One of the first things a visitor to Brunei discovers is that Prince Jefri is capable of more than shopping. "Jefri is not a humanitarian, but he felt an opening up was needed if Brunei is going to survive in the world," says a top aide. "He felt there needed to at least be an appearance of popular participation." In an effort to liberalize the fiefdom, Jefri beamed satellite TV into Brunei, along with his favorite hip London radio station. ("I'm horny, horny, horny!" a pop star sang on the radio one morning--moments before the call to prayer filled the street outside.) He contributed a Western-style school, a modern hospital, and a Disney-like amusement park. He built an $800 million resort, still unfinished, that he hoped would become a magnet for tourists. And in what may have been the final break in their relationship, he beat out his brother Mohamed with a bid to modernize the country's telecommunications network.

Mohamed's dislike of Jefri had been fermenting since at least the mid-1980s. But in recent years he had come to see his brother not only as a personal threat but also as a national one--a fear shared by Brunei's Education Minister, Pehin Haji Abdul Aziz, the country's most powerful conservative. As it happened, two scandals would come along and annihilate the monarchy's reputation in the foreign press, leaving Jefri exposed and isolated.

The first erupted in 1997, when an American beauty queen sued Jefri and the Sultan, charging that she had been lured to Brunei, drugged, and held captive in an attempt to turn her into a palace sex slave. "Heidi Fleiss was Snow White compared to what's going on here," exclaims the woman's lawyer, David Jaroslawicz. "They were tired of the professionals. The game was to find nice girls and turn them into whores." While there are reasons to question his client's account, and while the royal brothers have been severed from the suit thanks to diplomatic immunity, the case did reveal--at a minimum--that some of Jefri's friends and underlings were wildly out of control. Dozens, perhaps hundreds of foreign women had been paid vast sums to wiggle, giggle, and guzzle Cristal in private discos--in a land where alcohol and even most nightlife is taboo. And it seems some of the women were willing to serve as more than just pretty ornaments. The media orgy that followed raged for months. The bill would eventually land on Prince Jefri's doorstep.

The second blow to P.J. came last February in what was billed as the most expensive civil case in English history. A pair of Syrian-born brothers sued Jefri for reneging on two real estate deals; the prince countersued that he'd been fleeced for more than a decade by a pair of unscrupulous hustlers. The case was eventually settled, but not before revealing how P.J. and the Big One had shelled out roughly $1 billion for hundreds of luxury items that the Arab traders--Bob and Rafi Manoukian--had marked up by 100% to 600%. Jefri, for example, had paid the Manoukians $5 million for ten luxury watches--set with precious gems--that showed a man and woman copulating mechanically on the hour. A set of louche pens, also featuring a copulating couple, had been crafted in white gold. "You could sell Jefri anything," sighs one of P.J.'s attorneys. "All you had to do was tell him it was good. Do you think he could tell what is good and what is bad taste? On what basis?"

Jefri's lawyers argued, in essence, that their client was just a rube from the rain forest, a sucker too out of touch to notice the markups because the Manoukians had posed as close friends. "The Sultan and Jefri cannot tell the difference between a friend and a sycophant or a person who is trying to sell them something," says a member of the legal team. "They have no way to judge. The only real friends they ever had were each other."

Back in Brunei, Mohamed and Aziz, the conservative minister, had seen enough. In May, two months after the Manoukian case was settled, Bruneian authorities began freezing the domestic assets of Jefri's 27 local companies, known collectively as Amedeo (as in Amedeo Modigliani--P.J. owns several of the painter's works). Conveniently, both the Sultan and Jefri were overseas at the time, but when the Big One returned, "Acting Sultan" Mohamed, who serves as Brunei's Foreign Minister, explained that Amedeo had collapsed under the weight of its own excesses. Jefri's camp insists otherwise: "The company had $100 million to $200 million in trade payables currently due, and there were adequate funds to pay it," says one of his advisers. "There was no debt and no sign of deterioration. The collapse was forced upon it."

In the wake of that collapse, Brunei has begun to feel like a screwball Hollywood comedy. "What you have are three children in a schoolyard fighting over whose piece of chocolate belongs to whom," says a former attorney for the Sultan who remains close to the fireworks. "It's Moe, Larry, and Curly. There is no realism."

The Sultan put Mohamed in charge of fixing the economy, while Aziz was given the helm of a task force assigned to investigate Jefri's spending at the Brunei Investment Agency (BIA). The Big One then seized nearly $2 billion in Amedeo's assets and issued an after-the-fact "emergency order" giving him the right to seize private companies. When Brunei's Law Minister, a friend of Jefri's, objected, the Sultan promptly abolished the minister's post. "I guess when you have the magic wand, you can do those kinds of things," says a Western ambassador close to the scene.

Actually, states of emergency are standard procedure in Brunei. In 1962, British troops helped the Sultan's father crush an uprising by a tiny group of leftists who wanted to do away with the monarchy. An emergency was declared, a nascent legislature disbanded, and whole sections of the country's constitution suspended. That ended Brunei's brief flirtation with democracy. It also ended any threat of violence, then or since. Nevertheless, the current Sultan renews the "emergency" every two years. "Constitutionally, Brunei is somewhere in the early Tudor period, between Henry VII and Henry VIII," says Al Troner, managing director of Asia Pacific Energy Consulting. "They've started down the road to a real government, but they're moving damn slowly."

By the time I arrived in Brunei, in mid-September, the conservatives clearly had the Sultan's ear. Gone were the pleasure domes and the palace discos, as well as the "special tea" (read: beer) once served quietly in Chinese restaurants. A nervous jeweler told me he could no longer openly display his crosses and Buddhas following a recent series of raids by the government's religious-affairs police. Gone, too, were the armies of precious-gem salesmen who, for the benefit of the royal family, used to transform the local Sheraton into a virtual jewelry convention. When I checked in, the hotel was instead crawling with boyish accountants from KPMG, flown in to investigate the BIA. A second team of numbers cops from Arthur Andersen were holed up just down the road; their job was to serve as the new managers of Amedeo. "Those poor Western accountants won't even know where to begin," one of Jefri's aides had laughed. "When you have no walls between what is state money and what is family money, it just gets used."

So it would seem. The BIA's 1984 charter describes it as an investment arm for the "government." But of course the government is an absolute monarchy--it can do what it pleases, such as hand out three-year prison terms to anyone disclosing BIA's affairs. "We don't probe," concedes Rex deSilva, editor of the Borneo Bulletin, which bills itself as "the independent newspaper in Brunei," despite the fact that Mohamed's family controls it. "Whose money is BIA's has not been clearly defined, and you won't be able to answer it." Hoping to prove deSilva wrong, I tracked down an ex-BIA official, Sheikh Jamaluddin, now the country's tourism chief. "Sheikh Jimmy" was funny and up-front about the Herculean task of luring tourists to Brunei, but when I turned to BIA's true ownership, his face changed color. "I don't want to give you the wrong impression," he said, "or I'll be history."

However, if no one can say for certain--at least not publicly--to whom BIA's money belongs, there's no question who is being accused of stealing it. Not long after I arrived, KPMG announced it was examining the agency's outflows starting with 1984, the year BIA was chartered. But FortuE has obtained an internal government memo marking the probe's real initiation date as 1992. The distinction is significant: Jefri's biggest shopping spree began after 1992, while evidence exists that other officials may have dipped into the coffers in prior years. For example, an internal BIA document shows a $149 million transfer in 1990 to Mohamed Al Fayed, the London businessman long suspected of being a front for the Sultan. (Fayed is the father of Dodi, who perished in the car crash with Princess Diana.) In addition, a "confidential" 1993 letter from BIA's managing director refers mysteriously to two cash "transfers" totaling more than $11 million that were paid to his predecessor in 1990 and 1991. According to the letter, the transfers were made for a purpose "known only" to the recipient--who, as it happens, was just made a deputy on Aziz's task force probing BIA.

It's hardly shocking that in a country like Brunei, a once-favored prince could fall from grace so quickly. That fact is proof of little more than the Sultan's short attention span. Unfortunately, the Big One, like Nero, may ultimately torch his entire kingdom. For Amedeo's demise has done no less than wreck the economy. The firm had employed as many as 20,000 people, mostly Thai construction workers, who suddenly found their work permits revoked. Given Brunei's population, that's like booting nearly 20 million workers out of the U.S. "Arthur Andersen is there to destroy the company, not help it," charges Wayne Tempero, an ex-Amedeo executive who says he had many fights with the accountants. "They are so intent on investigating that nobody is working. They were never even given a brief of what Amedeo consisted of or what it did." Tempero says he "barely escaped" Brunei in early September after the head of the secret police--improbably named Major Muslim--threatened to put him in prison. "They accused me of shredding," says Tempero, who denies any wrongdoing. Strangely, the accountants haven't even bothered to interview Danny Wong, who ran Amedeo for Jefri. "I'm in the phone book," says Wong, who lives and works in Singapore. "Nobody has called me."

But Jefri's forces recently scored a brilliant counterpunch that could eventually send every accountant packing. In mid-September, P.J. won an injunction from a London judge against KPMG, the team investigating BIA, on the grounds that the firm had been double-dealing. KPMG had had access to Jefri's financial records while helping him in his legal battle with the Manoukian brothers--how could it then turn around and act against its former client? KPMG argued that a "Chinese wall" within the firm could keep the two investigations separate. But Britain's highest court, the House of Lords, recently ruled against KPMG. The case will likely transform Britain's accounting profession. It also brought the BIA probe in Brunei to a dead halt. Now Jefri's lawyers are considering suing Arthur Andersen on the theory that all of its interactions with KPMG make it equally "tainted."

Furthermore, Jefri's advisers raise the following reasonable questions about the case: If Jefri is a crook, they ask, would he have been dumb enough to use KPMG, the long-standing auditors for the BIA, in his earlier battle against the Manoukians? Would he have kept his personal and corporate accounts at Citibank in Brunei--the same bank used by the BIA? "Jefri wouldn't know how to steal," says an adviser. "He has no sense of what money is worth."

That much is obvious just based on his track record as a businessman. His foreign hotels are very successful, thanks to the management teams he has in place. But his 1995 purchase of Asprey, the English jeweler, for $385 million--nearly twice its market value at the time--was a disaster. Jefri apparently had never considered that the royals themselves had been Asprey's best customers. Once you factor out their business, what earnings multiple did Jefri pay? "Do you own a Cray computer?" asks an Asprey executive familiar with the deal. The company has been hemorrhaging money for two years and is now being restructured.

Jefri's dubious touch extended to his Brunei projects as well. Consider his Jerudong Park, possibly the world's largest free amusement park: There are cascading fountains, lush gardens, Italian-marble walkways, state-of-the-art roller coasters, and nonstop rock & roll. But where are the people? In a country where half the population is under 20, most of the time there aren't enough visitors to activate the rides. Jefri is trying to sell excitement to a nation of narcoleptics.

Across the highway sits Jefri's even emptier Jerudong Park Hotel--a 600-room, $800 million compound that features a saltwater lagoon, a Nicklaus golf course, eight swimming pools, nine restaurants, and the world's biggest atrium. There is 24-karat gold-leaf detail throughout the hotel, and gold-plated fittings in every bathroom. The place was intended to be used, at least in part, for palace functions. But from a purely commercial standpoint, "at $500 per night and a 90% occupancy rate, it would take 60 years for them to get their money back," says one hotel expert who has analyzed the project.

By all accounts, Jefri's worst move was to install his son Hakeem--a man who knows even less about business than he does about football--as the managing director of Amedeo. While I was in Brunei, one persistent rumor had the 25-year-old Hakeem under house arrest. This, it turns out, was a simple misunderstanding: "Hakeem can leave Brunei anytime he wants," laughs a source close to the court. "But he wouldn't know how to pick up the phone and take a commercial flight. So he probably feels trapped."

However conspicuous P.J.'s failings may have been, it's hard to avoid the feeling that fiscal responsibility is not what's driving the campaign against him. And sure enough, in mid-September, just one day after Queen Elizabeth ended a visit to Brunei and six days after Jefri won his injunction against KPMG, Aziz gave a rare briefing at a local university. Aziz warned the citizens to beware of falsehoods told through the foreign media. He invoked the name of God five times and declared that his investigation of BIA was being conducted "solely for the sake of Allah the Almighty." More specifically, he announced that the "misappropriation" of BIA's funds through Amedeo had been done "not only without His Majesty's consent but also entirely without the prior knowledge of His Majesty."

In London, Prince Jefri read Aziz's comments with alarm. In fact, those words lay behind his decision to end his "exile"--to fly to Brunei to warn his brother that he was being painted as a fool. After all, the Big One serves not only as the Prime Minister but also as Defense Minister, Finance Minister, Superintendent of Police, chancellor of the national university, and supreme leader of the Islamic faith. He appoints all of BIA's directors, and he has the agency's books audited every year by KPMG. If crimes were being committed right under the ruler's nose, what did that say about his ability to rule? "Jefri could see the beginnings of a setup against the Sultan," says one of his advisers. "He was ready to have it out with the Sultan and say to him, 'Do you realize where this leads?' "

It may lead down a trail blazed--however unwittingly--by the Sultan himself. Last year the Big One's two wives were fighting, as rival queens must, over whose son would be named heir. The prize eventually fell to the 24-year-old Billah, the Sultan's eldest son by Queen Saleha, his first wife. Billah was crowned in an elaborate public ceremony in August. But there's one problem: Jefri's advisers contend that Billah "can't walk and chew gum." Like his father, the visibly dimwitted prince is a product of first cousins, and he suffers from diabetes, poor eyesight, and God knows what else. The ascension of this less-than-convincing figurehead, the advisers warn, could be welcomed by conservatives such as Aziz--who, they suspect, are angling either to install a puppet or to topple the monarchy.

"If you are looking to knock out the royal family, Billah is your man," says one of P.J.'s aides. That kind of thinking could just be a function of spending too many hours lounging around the Plaza Athenee. Then again, plots against kings have a long and colorful history. Indeed, the foundation of most republics covers the bones of monarchy.

More than one Western diplomat agrees that this could be a pivotal moment for the kingdom: "Aziz has lots of influence and is building a power base," says one. "It's possible Jefri was going too far too quickly and too arrogantly.... It's even been rumored that Mohamed may take over as Prime Minister."

I'd been informed by a spokesman that Mohamed was "not very keen" to meet me. In fact, I was told no interviews with government officials would be granted to Fortune. As for Crown Prince Billah, the Sultan's spokesman in London assured me, he is "bright, diligent, serious," and perfectly fit to rule, while the Big One "is much more in charge than he might look in appearance." Aziz, he added, "is a believer in the sultanate."

The closest the spokesman could get me to the Sultan himself was one Yusof Sepiuddin, a vague, quasi-ambassadorial figure stashed away inside the Big One's diplomatic residence in London. One of Jefri's aides had told me Yusof "speaks to the Sultan every day. He knows the innermost secrets of everything." Perhaps, but when I spoke to the man, the experience only underscored the absurdity of the place. He demanded that I reveal where I'd gotten his phone number; when I declined, he told me to deliver the source the following message: "Never mix politics with the real thing. This is dangerous!" He warned that he would pay me a visit in the future if I misquoted him. "I'm not threatening you, but if anybody lied to me, I will give them a slap," he said. "Are you scared of that?"

Just after my return from Brunei, I met Yusof in the flesh. He was short, owlish; a security monitor on his desk threw a Mephistophelean glow over the office. After reminding me that I was on "diplomatic soil," Yusof opened a mouth full of crooked teeth and let fly with a series of evasions, contortions, and non sequiturs that would have done the royals proud. The conversation drifted to the question of why it was so hard to get any officials in Brunei to talk with me. "We're busy, but you don't understand the word 'busy.' You wanted to go to Brunei, eager beaver." But isn't that how a free press operates? "That's like saying if I punch you in the face, this is freedom." Yusof defended his country's censor board ("When stories are unfounded, why should they be allowed in?") as well as his government's state of emergency ("We haven't had any elections--so what?--the people are happy"). On the split between the Sultan and Jefri: "I do know there are a little bit of conflicts here and there--whatever I read in the paper.... This is none of our business. If you have a fight with your wife, what do you think, you should ask me?" Even getting him to say what he does for the Sultan was next to impossible: "If there's a message, I pass it on." Does that make you a messenger? "It's up to you how you label me--a messenger, a full messenger, a high messenger--I don't give a shit."

It turned out that as orators go, Yusof was a regular Cicero compared with Jefri. Two weeks later, at the end of September, P.J.'s suitcases were packed and we were sitting together at his palatial estate, deep inside London's Regent Park. Jefri had dressed casually in sneakers, blue jeans, and a black polo shirt. He's a slightly built man, far more handsome than the clock-stopping Mohamed, and while his English is very good, his aides did much of the talking. The prince--flanked by a $160,000 pair of solid-gold tissue dispensers--spoke less in sentences than in syllables. He giggled and glared and cocked his head as if I'd just fallen through the roof in a full suit of armor.

"Jefri is not geared for questions," explained an apologetic aide. "He is painfully shy," added another. Jefri did manage to say that he was "looking forward" to his return to Brunei, that he missed the Sultan, and that he was "upset, confused, disappointed" when his assets were suddenly seized. I asked how long he planned to stay in Brunei. "I'm very open," he responded. I tried another tack. Will the Sultan see you? "He knows I'm coming." Laughter filled the room, but I'd somehow missed the joke. Have the two of you spoken by phone? "Yes, it is good that way. He asked me about the weather in New York."

I wanted Jefri's views on the events swirling around Brunei. "You ask me? You were there." Again, more laughter. When I asked about Aziz and the conservatives, Jefri said that "they would have their own agendas." And what are those agendas? "You can tell me," the prince responded. Chuckles all around.

Clearly, this was the stuff of history, so I pressed on. I told Jefri it seemed that certain government officials wanted his country to become more conservative. "They didn't tell me," he responded. I also told him it was obvious from my visit to Brunei that he had done many things to open up the society. "What did I do?" he asked, sounding alarmed and confused.

The prince refused to criticize his brothers directly and declined to discuss BIA because of the country's secrecy laws. But when his advisers piped up to explain that Jefri had done "nothing mysterious or wrong" and that all his actions were approved by BIA's board, Jefri declared, "Thank you. That was wonderful."

After 45 minutes, my time had run out--a shame, since the interview had been going so well. An adviser told me Jefri would be canceling our photo session. He had a flu and didn't think he looked good enough to have his picture taken. Hoping to get the prince to reconsider, I told him he looked terrific. He laughed, spun around swiftly, and left the room.

An hour later, Jefri was gearing up for his flight to Brunei, and I was lighting my 1492 in a tony Mayfair townhouse, surrounded by a team of his advisers. When I asked who owned the place, no one could say. But one among the entourage leaned over to me. "I'm worried that I'll shake Jefri's hand and it will be the last time I see him," he said. "I told him that he's visiting a country he's never been to before."

I later learned that upon his arrival in Brunei, a police escort led P.J. to one of his many houses, which was surrounded by security forces. The prince wasn't sure whether the guards were there to protect him or to watch him. "There was a semblance of normality, but in a fairly unreal way," says a top aide. "They haven't exactly kissed and made up. Things remain tense because the economic situation is much graver than anyone imagined. The general feeling is that the Sultan is losing it, and that Aziz is increasingly running the show. The Sultan is still deeply confused in his own small brain as to why they suddenly haven't any money. Jefri's position is that he wants to do what he can to help his brother with assets they can liquidate to try and keep the thing afloat."

Jefri hadn't been in Brunei long before Arthur Andersen sent him a letter--which he promptly ignored--requiring his presence at a meeting. "Jefri doesn't react to require-presence letters," says an adviser, who tried instead to organize a meeting of all the players in a neutral nation. But even that proved impossible. "It's spooky," says the adviser. "We're in a very unpredictable period. This is like one of those deals years ago with the Soviet Union, where everybody would sit and argue for weeks about where they were going to sit at the table." Will Jefri be sued? Charged with a crime? "It depends on who's calling the shots," says the source. "From the Sultan's standpoint, they can't--and they shouldn't. From Aziz's standpoint, it might just be dandy."

One thing is certain: If Jefri is taken down, he'll try to take everybody along with him. One of his aides provided Fortune with a document purporting to show that brother Mohamed still owes $10 million on a $40 million home-cum-banquet hall that Amedeo built for him--allegedly with government funds. And not long ago, one of Jefri's attorneys sent a pointed letter to Yusof, reminding the Sultan's confidant that Amedeo had built a home for him as well. P.J. wanted to know when Yusof was planning to pay for it.

"I don't think, in the terms that you or I grew up with, that Jefri is a particularly good guy," says another lawyer. "But whatever he did wasn't any different from what his brothers did. The salient issue is that if this thing is ever fought, you'd have [legal] discovery of records, and they would have to lift the veil. I don't think they've thought this through too carefully. You're not talking about normal people."

The Fairy Tale's Over for the Kindom of Brunei

Forget anything you've read about the Sultan, his spendthrift brother, and those missing billions. If you don't, you'll never wrap your mind around the real story....

By Richard Behar

February 01, 1999

July 27, 2000

Good life is under threat in Brunei

By Mohan Srilal

Singapore - Brunei, the tiny oil-rich sultanate whose 310,000 subjects have an enviable annual per capita income of US$25,000, is beginning to tighten its belt.

After being rocked by a multi-billion-dollar financial scandal involving members of its own royal family, Brunei has finally come to grips with the fact that its oil reserves will start running out in 25 years' time. The Southeast Asian country's people will need to find other ways of maintaining their affluent and pampered lifestyles.

Brunei's citizens don't pay income taxes, there is no interest on housing loans and health care is free. They even have a lavish themepark on the outskirts of the capital where all rides are free of charge, perhaps the only one of its kind in the world. Oil revenues have also helped pay the salaries of some 60 percent of Brunei citizens, who work for the government with high pay, short working hours and perks such as interest-free car loans.

Many of these perks will soon come to an end, according to sweeping economic reforms announced by the government earlier this month. The new measures include plans to impose income taxes, slash government subsidies and set up a regional financial center to service Islamic banking worldwide.

''We are now opening up to the world. We know we lag behind our neighboring countries,'' Wahab Juned, director-general of the Brunei Economic Council (BEC), said at a recent news briefing. He said the 1997 Asian financial crisis has helped Brunei to open its mind and reconsider its economic policy, which was dependent on oil and gas reserves.

Brunei's economic output - more than half of which comes from oil and gas - grew by just 1 percent in 1998 and 2.5 percent last year.

In a bid to diversify its economy, Sultan Hassan al Bolkiah announced on his 54th birthday this month that Brunei will become an international financial center focusing on Islamic financial services. ''The center is designed to make our nation the financial center for Islamic banking, securities and insurance,'' he said in his annual "state of the sultanate" speech to the nation.

''Although it is a very competitive area, this is a niche which we can succeed in,'' Brunei businessman Timothy Ong, also chairman of the Asia-Pacific Economic Cooperation Business Advisory Council, told the Singapore-based newspaper Straits Times.

The financial center idea is a key proposal in Brunei's National Economic Recovery Plan, which was formulated following the 1997 Asian financial crisis and the collapse of the Amedeo conglomerate headed by Prince Jefri Bolkiah, the sultan's brother.

The government has been keen to emphasize that lessons from the 1997 Asian financial crisis have encouraged Brunei to reform its economic policies. However, Brunei was one of the least effected of the Asian economies. This is why many analysts believe that it is the Amedeo scandal which has rocked the foundations of not only Brunei's economy, but its society as well.

Prince Jefri, the 46-year-old younger brother of the sultan, was Brunei's finance minister from 1986 to 1997. He was also the head of the Brunei Investment Agency (BIA), which managed the country's overseas investments once valued at more than $110 billion.

Prince Jefri was fired from BIA in 1998 after his conglomerate, Amedeo, collapsed, leaving $6 billion in debts. Subsequently, it was also found that under Prince Jefri's tutelage BIA has squandered more than $40 billion in state funds in a variety of dubious investments, while he was also finance minister.

Earlier this year, the sultan took his brother and 70 others to court to recover some of these state funds. The court case exposed the lavish lifestyle of the royal family and how its members have used state funds as virtually their private money. It was the first time that the people of Brunei were given an insight into the highly secretive financial dealings of the BIA. The sultanate's accounts are not made public, and it is a criminal offence to divulge or report on the country's finances.

During the court case, it was revealed that Prince Jefri had kept 40 call girls at his service at any one time in London. He also had four wives, 35 children and a large staff to maintain. He has reportedly spent $2.7 billion over a 10-year period on his lavish lifestyle. He is believed to own some 2,000 cars, a number of yachts and 17 aircraft.

The $15 billion lawsuit, which cut into the core of the sultanate's newfound financial insecurity, was settled out of court in late May. Under the settlement, the prince and his co-accused agreed to return all assets - including hotels and properties in many continents - bought with the state's money to the state.

Brunei's leaders have now begun thinking the unthinkable - and calling for transparency. ''Transparency is not a new thing. The issue now is how far we want to be transparent,'' said Education Minister Abdul Aziz Umar recently. ''Brunei, like other countries in the region, is now accepting transparency as something good, especially in terms of creating a conducive environment for investments." he added.

The local newspaper, Borneo Bulletin, commenting on the government's new economic thinking, said the government is now trying to function as a regulator and facilitator rather than a service provider. ''Apparently the government also wants to run like a corporation now and to make Brunei run like a Brunei Incorporated,'' it said.

March 10, 2000

'Everyone Was Shocked'

A scandal climaxes as the Sultan's brother is sued.

By Roger Mitton

The flurry of events left Bruneians in a daze. On Feb. 22, the office of the prime minister, Sultan Hassanal Bolkiah, released a three-page statement. It said that his younger brother, Prince Jefri, would be charged in court with the "improper withdrawal and the use of substantial funds from the Brunei Investment Agency [BIA], which constitutes the state reserve fund" - in short, with stealing the government's money. An hour later, the statement was embargoed without explanation. In fact, the government was waiting for British courts to freeze Jefri's assets before it went public.

On Feb. 23, Brunei celebrated its National Day. The next morning, lawyers representing the prince appeared at the High Court. Then Hassanal's office lifted the news embargo. "Everyone was shocked, but some people wonder if there will be a whitewash," says a local academic. "They wanted to see criminal charges against Jefri, not just civil." Besides the charges and the asset-freezing, the prince was hit with a travel ban.

How did he land up in this mess? It goes back to 1997, when word spread of alleged fraud by Jefri's flagship company, Amedeo. He was sacked as finance minister as the scandal burgeoned and darkened the Bolkiah family's future. Last July, Amedeo was wound up in the Brunei High Court with debts of $3.5 billion - leaving creditors fuming. Jefri was still living it up in exile, jetting between his luxury homes in London, Paris and New York.

On Jan. 11, persuaded that an amicable settlement could be reached with his brother the Sultan, he returned to Brunei. "They lured him back, but no settlement has been reached," says a local businessman. "They want him to return all the money and property." It is no small beans - Jefri is alleged to have improperly acquired millions, if not billions, from state funds when he was finance minister and head of the BIA, which administers the country's assets. The agency, during Jefri's tenure, was said to have controlled more than $30 billion. After he left, it reportedly had less than $20 billion.

While other members of the Bolkiah family are known for their high living, Jefri did it more blatantly and extravagantly. Also, his lifestyle riled some clan members, notably his other brother, the conservative foreign minister, Prince Mohamed. As the debacle unfolded, a financial task force was set up under Mohamed's colleague and the new BIA chief, Education Minister Aziz Umar - Jefri's nemesis. Aziz soon alleged that huge amounts of BIA funds had been misappropriated while Jefri headed the agency.

Next, what remained of the prince's business empire - the lucrative Jasra oil interests and the DST mobile phone company - was expropriated. Then, based on the evidence gathered by Aziz's task force with the help of foreign financial experts, Jefri was lured back and formally charged. So, too, were his son Hakeem and his ex-secretary Awang Kassim. Officials say that more of Jefri's associates will soon face charges, possibly including former ministers and businessmen in Malaysia and Singapore.

Few people believe Jefri will go to jail, but many think the government will grind him down until he signs over his properties and returns as much money as he can. The prince's position in Bandar Seri Begawan is weak. Separated from his publicists and principal lawyers in London, he has hired Bandar's newest law firm to represent him. His London PR company issued a statement saying: "Jefri vigorously denies the claims made against him by the Brunei Investment Agency and will be defending himself."

Will the saga affect Brunei's stability? "For now, there is still loyalty to the royal family," says a diplomat. But the scandal will taint the Bolkiah name and could dilute the clan's absolute hold on the oil-rich country. Moreover, despite rising oil prices, Brunei faces flagging growth and its enviable living standards could dip. The palace is portraying the Jefri affair as a case of the law taking its course. "The domestic media have been told to report this as a matter of the people acting against Jefri to get their money back," adds the diplomat. "They do not want it reported as a family feud. But that is what it is."

Others praise the government for finally being open about the whole affair. "Previously there was no transparency," notes the diplomat. "Now it is on the front pages." Brunei authorities also want to end the sordid saga before hosting the APEC summit in November, their biggest-ever such international effort. So a resolution is likely soon. Whatever it is, Jefri's high-flying days are over for good.

The £8 billion family feud

By Andrew Alderson

May 13, 2006

Once their long working day is over, the rival teams of British lawyers play golf, tennis and badminton in the palatial surroundings of their five-star hotel.

After exercising, they can swim in one of the Empire Hotel and Country Club's eight luxurious pools.

Each morning, at around 8.15am, the 10 barristers and solicitors, together with three appeal court judges, have been taken by a fleet of chauffeur-driven black BMWs and Mercedes from their hotel, nestling beside the South China Sea, to Brunei's High Court of Justice 15 minutes away.

It is there, sitting in camera and with three uniformed guards on the door of the spacious courtroom, that Sir Derek Cons, the president of the appeal court, yesterday brought down the curtain on the latest round in a bitter legal battle.

The hearing, which began two weeks ago, was the result of a feud involving two royal brothers which has caused untold embarrassment to Brunei, the sultanate the size of Norfolk that lies north of Borneo.

Since 1998, rival lawyers have represented the Brunei Investment Agency (BIA), the investment wing of the Sultan of Brunei's autocratic government, and Prince Jefri, his younger brother, who has been accused of siphoning off £8 billion from the state that once provided him with a standard of living most people only dream about.

The details that have emerged of profligacy and decadent lifestyles would make uncomfortable reading for the ruler of any country.

For the royal family of staunchly Muslim Brunei, which once prided itself on its discretion, the events have proved cataclysmic.

The legal dispute has uncovered the playboy antics of Prince Jefri, aged 52, who is alleged to have spent more than £1.5 billion on himself in his final 10 years as finance minister, before he was stripped of the job in 1997.

Much of the money allegedly went on a succession of "toys": some 2,000 cars, including Ferraris, Rolls-Royces and Aston Martins; 17 aircraft, including a Commanche attack helicopter; and a 180ft yacht, the less-than-tastefully named SS Tits.

As well as having two speedboats on board - Nipple I and Nipple II - the yacht had 24-carat gold-plated fittings and lifts between the decks. Other stories emerged of his fondness for women with lifestyles as fast as his cars.

Prince Jefri had channelled much of Brunei's oil and gas wealth into an investment company, Amedeo. His problems began when Amedeo, damaged by the economic crisis in Asia in 1997, collapsed, forcing the Brunei government to bail it out.

As part of the Prince's out-of-court settlement with the BIA in 2000, he agreed to hand over £3 billion in assets, and 10,000 lots - from 16,000 tons of Italian marble to Mercedes-Benz fire engines - were sold at an auction in a "sale of the century".

At one point, the Prince looked as if he might face contempt charges, but such moves have been dropped.

The lifestyle of the Sandhurst-educated Sultan, a friend of the British Royal Family, is hardly frugal either. He lives in a 1,788-room palace, with corridors of gilt and marble.

He has a love of polo and shares his brother's fondness for top-of-the-range cars. Indeed, at one point in the 1990s, it was claimed that the Brunei royal family accounted for half of the sales of Rolls-Royces worldwide.

The Sultan, who, with an estimated fortune of £60 billion in 1990, was regarded as the world's wealthiest person, does not hold back on gifts or parties: one of his daughters received an Airbus for her 18th birthday, while he hired Michael Jackson to perform at his own 50th birthday party 10 years ago.

Over the past fortnight, other cases in the appeal court had been cleared to allow the hearing to go ahead unhindered.

Rumours abound that the Sultan wanted the legal action out of the way before July 15, so that it did not tarnish his 60th birthday celebrations.

His Majesty Sultan Haji Hassanal Bolkiah is the 29th of his line, which dates back to the 14th century. He has ruled since 1967 and his current titles include prime minister, defence minister and finance minister.

Yet few pretend the Sultan, who is married with four sons and six daughters, is anything other than an absolute ruler in a country with a population of 350,000.

For the past two weeks, neither the Sultan nor his brother, who have not spoken for two years, were in court.

The judges, normally based in Hong Kong, sat beneath a giant photograph of the Sultan as they listened to evidence relating to Prince Jefri's appeal against two earlier judgments from the chief justice of Brunei.

The first appeal was against a ruling last year that refused to allow Prince Jefri to have his case heard in a foreign court. His lawyers, led by James Lewis QC, argued that the legal system in Brunei was not sufficiently independent of the Sultan to allow the Prince a fair hearing.

In a second appeal, Prince Jefri's lawyers were trying to overturn a ruling made earlier this year entitling the BIA to issue orders against Prince Jefri to enforce the terms of the settlement agreement he signed in May 2000, including the transfer of £3 billion of his assets to the BIA.

By the time it is over, the legal battle promises to be one of the most costly ever. Aides to Prince Jefri have estimated that the BIA's legal fees, including those of Freshfields Bruckhaus Deringer, the Sultan's London solicitors, could reach £200 million - a figure said to be "ridiculously high" by an adviser to the royal family. However, the final cost of the eight-year dispute could end up at between £250 million and £500 million.

Each side sees the dispute differently. Prince Jefri's camp tries to portray the legal action as a vindictive act by the Sultan against his younger brother.

The Prince's lawyers had earlier argued that the transfer of acquisitions from the BIA was lawful and undertaken with the approval of the Sultan.

The Sultan's lawyers, however, claim he is personally detached from the dispute and that the legal action was forced on the BIA by Prince Jefri's refusal to honour the settlement made six years ago.

"This is not simply a spat between warring brothers," said an adviser to the royal family. "Prince Jefri has lost every substantive case and hearing since 1998 and his last hurrah is to say, 'I can't get a fair trial anyway'."

The rulings from the appeal court are expected next month. Meanwhile, the royal family is fearful of the repercussions that the continued negative publicity surrounding the case will have on its allies in the West and its own people.

The US State Department, in its review of Brunei published in March, noted that there were "problems in the government's human rights record, particularly in the area of civil liberties".

Its concerns centred on the lack of democracy, arbitrary detention, discrimination against women and foreign workers, and constraints on freedom of speech.

The Sultan knows that he must retain the support of his people. In 1962, a full-scale rebellion in Brunei had to be suppressed by British troops.

The intervention, which led to a "state of emergency" that is ongoing, was before independence from Britain in 1984. If anything were to prompt a second revolt, the Sultan's position would be even more precarious.

From palace to prison: Sultan of Brunei's brother faces jail over £3bn court order

By Andy McSmith

June 12, 2008

Prince Jefri of Brunei, the billionaire playboy whose expensive tastes have become the stuff of legend, is facing the prospect of swapping his life of luxury for a jail cell after failing to turn up for a court hearing.

A judge issued an arrest warrant yesterday for the exiled prince, the youngest brother of the Sultan of Brunei, adding a strong hint that he will be denied bail if found. He is thought to have fled to France or Monaco. "If he is arrested it will take an advocate of great skill to persuade me that he should have bail," said Mr Justice Peter Smith.

A prison cell would be a terrible comedown for a man accustomed to opulence beyond a normal person's wildest dreams, in which even the lavatory brush holders are lined with gold. His London address is St John's Lodge in Regent's Park, one of the capital's most spectacular private homes.

He came to grief in one of Asia's most sensational royal scandals, which became public in 2000 when the Brunei government accused him of siphoning off about £8bn of Brunei's money into his own Amedeo Development Corporation during his 13 years as Finance Minister.

Amedeo went bust at a time when oil prices were low and there was an economic crisis in Asia. Its debts almost bankrupted the country. Prince Jefri reached an out-of-court settlement in 2000 requiring him to hand over £3bn.

He claims he complied with the order, but in 2004 the agency accused him of failing to hand over five properties in the US and Europe and a trust fund that were all included in the order.

Prince Jefri left Brunei, made London his main residence and took his case to the Privy Council, the final court of appeal for many former British colonies.

Last November, the Privy Council ordered him to hand over the New York Palace Hotel, the Hotel Bel-Air in Los Angeles, three homes in London and Paris, and the trust fund.

Yesterday should have been the start of a five-day court hearing into whether the prince has breached the court order, but when the court convened, he was absent. His counsel, James Lewis QC, told Mr Justice Smith that the prince had contacted his solicitors from France to say that he was not going to attend. "Tell me where he is, or don't you know?" the judge said. "I don't know where he is. He is abroad, I believe in France," said Mr Lewis. He said he had also given an address in Monaco.

The judge concluded that this was the prince's way of giving himself "two bites of the cherry", by claiming that he had not been able to defend himself if he was convicted. He said: "I know how people choose to work the system, if they want to do it. Game one is always a no-show, and if it goes their way, all well and good, but if it goes badly you want another go. Game three is he sacks all his lawyers and comes up with a new team, blaming the old lawyers for not doing it properly."

Any trial in the prince's absence was likely to be "half-cocked" he said. He ruled the prince in contempt of court, and issued an arrest warrant which can be extended across the EU.

The prince maintains that some of the stories about his lifestyle are exaggerated or untrue. But the world was given an insight seven years ago when some of his possessions were put up for auction in Brunei, raising around £4m. The items included 8,500 slabs of Italian marble, 200 lampposts, a Formula One racing simulator, an aircraft flight simulator, hundreds of gold-plated lavatory brush holders, thousands of expensive items of crockery and utensils, and a white Jacuzzi complete with gold-plated fittings. Other assets, such as a flight simulator for an attack helicopter and two unused fire engines, were held back for a subsequent sale.

According to the Brunei media, Prince Jefri has four wives, 17 children and 18 adopted wards.

An oil-rich dynasty

*Haji Hassanal Bolkiah Mu'izzaddin Waddaulah, the Sultan and Yang Di-Pertuan of Brunei Darussalam, is the 29th ruler in an unbroken line going back more than 600 years. His 20bn fortune makes him the world's third richest oil sheikh. He rules his tiny country from a palace said to contain 1,788 rooms. For two centuries, his family ruled a large island empire, but wars and the arrival of European conquerors confined them to a corner of Borneo. Oil was discovered in 1929. The family placed itself under British protection in 1847.

OutFront

Richest Royals

By Devon Pendleton, Forbes.com

September 17, 2007

Last year's movie sensation, The Queen, about Queen Elizabeth II, captured the monarch's lavish lifestyle from castles to servants. But she comes in a mere eleventh in our latest ranking of the world's richest royalty. At the top is the Sultan of Brunei, who celebrated his fortieth anniversary as ruler of the oil-rich land this year. Seven of the rulers on our list preside over territories in the Middle East and North Africa. Keep in mind that the wealth of the royals is often shared with extended families and can represent money that is controlled by them in trust for their nation or territory.

1. Sultan Haji Hassanal Bolkiah

Sultan/Brunei $22 billion Age: 61

Became 29th Sultan of Brunei 40 years ago, inheriting riches of an unbroken 600-year-old Muslim dynasty. Rules concurrently as the oil-rich land's prime minister, defense minister, finance minister and head of religion.

2. Sheikh Khalifa Bin Zayed Al Nahyan

President/United Arab Emirates $21 billion Age: 59

Hereditary ruler of tiny emirate Abu Dhabi, home to one-tenth of world's oil reserves. Reinventing emirate as "cultural hub" of Middle East; Frank Gehry-designed branch of the Guggenheim Museum set to open in 2011.

3. King Abdullah Bin Abdulaziz

King/Saudi Arabia $19 billion Age: 83

King since August 2005; soon after, began construction on a $26 billion city named in his honor. More fiscally conservative than his big- spending half-brother, the late King Fahd.

4. Sheikh Mohammed Bin Rashid Al Maktoum

Ruler/Dubai $16 billion Age: 57

"CEO of Dubai Inc." shares fortune with two brothers. Government holding companies bought big stakes in HSBC and Deutsche Bank; bid for U.S retailer Barneys New York.

5. King Bhumibol Adulyadej

King/Thailand $5 billion Age: 79

World's longest-reigning living monarch is U.S.-born, Swiss-educated and revered as deity in Thailand. Family fortune includes investments, real estate mostly held through Crown Property Bureau.

6. Prince Hans-Adam II von und zu Liechtenstein

Prince/Liechtenstein $4.5 billion Age: 62

Heads country. Family fortune goes back 900 years. Family has been collecting art for four centuries; own 33 Rubens, largest number in private hands.

7. King Mohammed VI

King/Morocco $2 billion Age: 44

Nicknamed "King of the Poor" for efforts to alleviate poverty and improve human rights. Palace's reported budget exceeds $960,000 a day, much spent on clothes and car repairs.

8. Prince Albert II

Prince/Monaco $1.2 billion Age: 49

Eligible bachelor inherited tiny principality after father's death in 2005, as well as fortune in real estate, art and stake in Monte Carlo's casinos.

9. Sheikh Hamad Bin Khalifa Al Thani

Emir/Qatar $1 billion Age: 55

Overthrew father in a bloodless coup in 1995. Sports enthusiast bringing events like Asian Games to tiny state. Funded Al Jazeera and its English-language sister station.

10. Prince Karim Aga Khan

Prince $1 billion Age: 70

Celebrated fiftieth anniversary as leader of world's 15 million Ismaili Muslims this year. Suave businessman runs business conglomerate from France and Switzerland.

11. Queen Elizabeth II

Queen/U.K. $600 million Age: 81

Long-reigning Queen keeps active travel schedule, including a state visit to the U.S. this year, her fourth since 1957. Real estate holdings in England and Scotland appreciating.

12. Sheikh Sabah Al Sabah

Emir/Kuwait $500 million Age: 78

Took over as emir in 2006 after crown prince deemed too ill to ascend throne. Soon after, voted for a significant raise in the royal family stipend.

13. Sultan Qaboos Bin Said

Sultan/Oman $500 million Age: 66

After six years under house arrest, overthrew father in 1970. Began modernization to open country to outside world. Funded restoration of a dozen mosques.

14. Queen Beatrix Wilhelmina Armgard

Queen/Netherlands $300 million Age: 69

Powerful monarch appoints prime minister and deputies, signs bills into law. Family fortune includes real estate, equity investments and antiques.

15 King Mswati III

King/Swaziland $200 million Age: 39

Africa's last absolute monarch assumed throne at age 18. Wealth derived from investments, real estate. Lavish spender building palaces for each of his 13 wives.

Playboy Prince Loses Expensive Family Feud

Prince of Brunei Must Give Up Hotels, Houses, Diamonds and Art.

By Christine Brouwer

November 11, 2007— ABC News

The wealthiest royal in the world is a billion dollars richer this week after taking his little brother to court for embezzlement of state funds.

Sultan Haji Hassanal Bolkiah of the tiny, oil-rich Southeast Asian nation Brunei will get back pricey toys from his playboy brother, Prince Jefri Bolkiah, including the famed New York Palace Hotel in Manhattan and the luxury Bel Air Hotel in Los Angeles.

Also included in the settlement are lavish homes in Paris and Singapore, artwork, and precious jewels.

It might be the most expensive family feud ever fought.

Thursday's ruling in a British court capped more than 20 years of sparring between the two brothers. In several court cases, Sultan Bolkiah, who took the throne in 1967, accused his younger sibling, once Brunei's Finance Minister, of stealing billions of dollars in federal funds during his time as chairman of the country's national investment agency.

Some $40 billion left Brunei's state coffers in "special transfers" during Prince Jefri's tenure with the agency in the 1980s and 90s, according to court documents. Of that, nearly $15 billion has been traced directly to the prince's accounts.

Another $13.5 billion is still missing.

The Sultanate of Brunei, slightly smaller than the state of Delaware and bordering on Malaysia, sits on vast oil reserves and is one of the richest states in Asia.

"They have huge amounts of money," said Mark Watson, a royalty expert from Britain, of Brunei's royal family. "Obviously that comes from the revenues of their natural resources. [They've got] oil and everything else. They're not doing too badly."

Prince Jefri never denied "he was the recipient of very substantial sums of money" while running Brunei's investment agency, according to court documents, but argued he was authorized to spend the money and did so only on his brother's orders.

But when Brunei authorities sued him in 2000, Prince Jefri, who lives in London and has 17 children, agreed to give back a substantial amount of the missing cash and some contested properties.

The Prince sold off most of his 2,000 luxury cars, several swanky yachts and a few airplanes to try to pay his brother back, according to a report in the New York Post.

He also put some other pricey luxuries up for auction, including brand-new fire engines, an Airbus A340 flight simulator, hundreds of tons of Italian marble, and gold-plated toilet paper holders.

But he never even got close to repaying the full amount.

According to Thursday's ruling, Prince Jefri told the court he had reached an "oral agreement" with his brother that allowed him to keep some of his prime possessions to "continue to fund a suitable lifestyle for himself and his family."

But five judges threw out the prince's claims, calling his argument that the Sultan had agreed to such an arrangement, "simply ridiculous."

Now Prince Jefri must not just hand over the contested properties but pay Brunei's legal fees as well.

The Sultan, meanwhile, is no stranger to big spending himself, topping the Forbes 2007 "Richest Royals List" with $22 billion to his name.

To illustrate the Sultan's financial power, Watson gave the example of the ruler's private jet a Boeing 747, normally a 400-passenger plane, on permanent standby at a small airport in England.

"Its sole purpose is to fly members of the royal family [in Europe] out to wherever they want to go," Watson said of the double-decker craft, which he said comes with its own fulltime crew. "If you've got that kind of money, why would you want to book a regular flight?"

Brunei's royal palace is rumored to have 1,788 rooms, according to Forbes.com. And when one of the Sultan's daughters got married in June, the party lasted a full two weeks.

But while his spending is lavish and his rule absolute, some might say Sultan Haji Hassanal Bolkiah spreads the wealth.

In addition to receiving free health care and education, Brunei's population pays no taxes to the government.

"They infinitely better off than the rest of the continent," Watson said of Brunei's estimated 375,000 citizens. "What's to complain about?"

Brunei's prodigal prince faces uncertain future after order to surrender hotels, homes

The Associated Press

November 14, 2007

Kuala Lumpur, Malaysia: He's been called the "Playboy Prince" who purchased everything from luxury planes, yachts and cars to Italian marble and gold-plated toilet roll holders.

Brunei's disgraced Prince Jefri Bolkiah may have to adopt a more modest lifestyle following a British court's ruling last week: The court ordered him to surrender ownership of prestigious U.S. hotels and European homes to the Brunei government's investment arm as payback for allegedly helping himself to billions of dollars from state coffers.

The verdict is the latest chapter in one of Asia's most sensational royal scandals, which has shone the spotlight on the opulent life of this oil-rich sultanate's ruling family.

The scandal became public in 2000 when the government accused Jefri, the youngest brother of Brunei's supreme ruler Sultan Hassanal Bolkiah, of embezzling nearly US$16 billion (€11 billion) from state coffers while Jefri was finance minister between 1986 and 1998.

The losses nearly bankrupted the country, located in a corner of Borneo island, coming at a time when revenues were stretched by low oil prices and the Asian economic crisis.

Jefri's shenanigans estranged him from Hassanal, one of the richest men in the world, who lives in a gold-decked 1,788-room palace and whose own lavish lifestyle is legendary.

Jefri reached an out-of-court settlement with the government in 2000, agreeing to pay back Brunei's investment arm the money he allegedly used to buy hotels and other expensive assets.

But the Brunei Investment Agency, which used to be headed by Jefri, launched court proceedings in 2004, saying the prince had not transferred ownership of five U.S. and European properties and a trust fund as required by the settlement.

Jefri, 53, left Brunei in 2004 and has mainly lived in London since then.

He has four wives, 17 children and 18 adopted wards, according to Brunei media. He has denied any wrongdoing, saying he had the authority to use state funds.

According to Britain's Privy Council, the final court of appeal for many British territories and former colonies, Jefri said the disputed assets "enable him to continue to fund a suitable lifestyle for himself and his family."

The Privy Council, however, was unmoved. It ruled last Thursday that Jefri must transfer ownership of the New York Palace Hotel, the Hotel Bel-Air in Los Angeles, three residences in London and Paris and a trust fund to the Brunei agency.

Jefri contended he had an oral agreement with Hassanal entitling him to keep those "six very valuable assets," the Privy Council said in a ruling seen on its Web site.

"It appears ... that the Sultan had some sympathy with Prince Jefri's lifestyle concerns," the council said. "But nothing in the documentary records suggests that a firm agreement had been reached or ... that the Sultan had ever agreed to Prince Jefri retaining the six assets."

A legal expert close to the Brunei Investment Agency said Jefri has not responded to the verdict, but the agency's lawyers hope to meet Jefri's representatives in London soon. Discussions about Jefri's finances might be held separately, but Jefri would continue to receive a regular, undisclosed entitlement accorded to all Brunei royalty, the expert said on condition of anonymity because of the sensitivity of the issue.

Jefri has "no other legitimate source of income," the expert said. An official close to the Brunei agency, also speaking on condition of anonymity citing protocol, said Jefri won't be compensated for revenue loss once he surrenders the assets.

Jefri's representatives could not immediately be contacted.

The British court said Hassanal apparently indicated on a number of occasions that once Jefri hands over the assets, "arrangements to meet these (lifestyle) concerns would be made."

But the court struck out Jefri's contention that he agreed to the 2000 settlement because of Hassanal's "position as the ruler with ultimate power and authority in Brunei."

"Prince Jefri was not just any subject," it said. "The picture sought to be painted of Prince Jefri as a victim whose will was overridden by a dominant monarch seems ... to be obviously false."

The council described Jefri's various other contentions as "simply ridiculous," "devoid of weight" and "factually implausible."

"The complications are introduced by Prince Jefri's search for a means of extricating himself from the obligations he has accepted under the settlement agreement," it said. "After careful examination of all the evidence, these complications fall away."

Brunei has vast oil and gas reserves that have fueled the royal family's fortunes.

Hassanal, 61, had an estimated net worth of nearly US$40 billion in 1997, the most recent figures available. He too has a reputation for extravagance. While playing polo with Britain's Prince Charles, Hassanal once had his polo shoes delivered by helicopter to the palace field.

June 11, 2008

Britain issues warrant for arrest of Brunei's Prince Jefri Bolkiah after court no-show

By Jill Lawless

London (AP) - A British judge issued an arrest warrant for Brunei's Prince Jefri Bolkiah after he failed to show up for a court hearing Wednesday.

The disgraced brother of the oil-rich state's ruling sultan is enmeshed in long-running legal proceedings over billions of dollars he is alleged to have embezzled while he was Brunei's finance minister.

Jefri, dubbed the "Playboy Prince" for his lavish lifestyle, was due in court Wednesday to face allegations that he violated a court order to hand over 3 billion pounds (US$5.9 billion; 3.8 billion) in cash and assets to the Brunei government's investment arm.

His lawyer, James Lewis, told the High Court hearing that he did not know where his client was, but thought he was in France or Monaco.

"My understanding is that he does not mean to attend these proceedings at all," Lewis said.

Judge Peter Smith issued a warrant for the prince's arrest and warned that he faced jail if he was apprehended.

"If he is arrested it will take an advocate of great skill to persuade me that he should have bail," Smith said.

Brunei's royal scandal became public in 2000 when the government accused Jefri, the youngest brother of Brunei's supreme ruler Sultan Hassanal Bolkiah, of embezzling nearly US$16 billion while he was finance minister between 1986 and 1998.

The losses nearly bankrupted the tiny country, located in a corner of Borneo island, at a time when revenues were stretched by low oil prices and the Asian economic crisis.

Jefri's shenanigans estranged him from Hassanal, one of the richest men in the world, who lives in a gold-decked 1,788-room palace and whose own lavish lifestyle is legendary.

Jefri reached an out-of-court settlement with the government in 2000, agreeing to pay back the money he allegedly used to buy hotels and other expensive assets.

But the Brunei Investment Agency, formerly headed by Jefri, launched court proceedings in 2004, saying the prince had not transferred ownership of five U.S. and European properties - including the New York Palace Hotel and the Hotel Bel-Air in Los Angeles - and a trust fund as required by the settlement.

Last year a British court ordered him to hand over the disputed assets.

Jefri, 53, left Brunei in 2004 and has mainly lived in London, where he owns St. John's Lodge, one of the city's most lavish homes.

He has four wives, 17 children and 18 adopted wards, according to Brunei media. He has denied any wrongdoing, saying he had the authority to use state funds.

Sultan to sell Embankment Place

By Nick Mathiason, The Observer

August 15, 1999

The man once renowned for being the richest in the world is selling a prized London property as part of a big belt-tightening exercise.

The Sultan of Brunei's fortune is reported to have plummeted from £25 billion in 1989 to £3.12bn today, and the drop has prompted talks aimed at selling a massive office block above Charing Cross station for close to £235m.

The Observer has learnt that negotiations aimed at selling Embankment Place - the modernist building designed by UK architect Terry Farrell and home to accountant PricewaterhouseCoopers - are being held with two separate parties .

Sources close to the Brunei Investment Authority, the sultanate's overseas investment vehicle, deny all knowledge of the sale. But a source representing Middle Eastern money confirmed that negotiations to buy the 360,000 sq ft are live. 'The situation is that they are in negotiations with two parties,' he said. 'The parties approached the Brunei Investment Authority because the Sultan needed the money.'

A senior UK property insider added: 'The Charing Cross building is available. It's not on the open market, but they're listening to offers.'

A clearing the size of Norfolk amid tropical jungle in northern Borneo, Brunei is an oil-rich state where alcohol is banned. It won outright independence from Britain in 1984.

Sultan Hassanal Bolkiah is the country's 29th Sultan. He owns some of the world's most famous hotels, including the Dorchester in London and the Beverly Hills, where Elizabeth Taylor spent seven of her nine honeymoons.

But the Sultan fell victim to the Asian economic crisis and blew an estimated £1.25bn propping up a basket of tiger currencies. To compound the situation, the Sultan's brother, Prince Jefri Bolkiah, has a reputation for reckless extravagance. He once spent £3.12 million 10 gem-encrusted watches that showed a couple fornicating on the hour.

Last year, the Sultan hired accountants from Arthur Andersen to close down Jefri's spending vehicle, Amedeo. It is believed that there is a £6.25bn hole in the Sultan's finances, but this could be exacerbated by falling Asian property values, the cost of winding down Amedeo and losses from selling other assets.

Last autumn came the first sign of financial prudence, when the Sultan cancelled a £20m order for Rolls-Royce and Bentley cars. Last month, property sources say, the Sultan sold a London property called Chesterfield Gardens for £20m. It was meant to have become a luxury London home for the Sultan's family.

It is thought that the likely buyer for Embankment Place, which could be one of the biggest property deals ever seen in London, is either a German fund or a leading UK institution.

The Brunei Investment Authority bought Embankment Place two years ago for £212m from Greycoat, the UK property company that went private earlier this year. The building produces £17m in rent each year.

Sinking fortunes

1945: Brunei becomes a self-governing sultanate.

1950: Brunei strikes oil.

1967: Aged 21, Sultan Hassanal Bolkiah Mu'izzaddin Waddaulah becomes 29th Sultan.

1984: Gains independence.

1987: Sultan crowned world's richest man by Fortune magazine.

1997: Bill Gates replaces Sultan as world's richest man

1998: Sultan sacks brother Jefri for overspending

1999: Sultan down to last £3.12 billion.

April 03, 2000

Brunei's Battle Royal (int'l edition)

As sultan and prince go to court, the economy suffers.

Poor little rich Brunei. For the past two years the tiny sultanate, which controls vast oil fields off Borneo's coast, has been wracked by a squabble between Sultan Hassanal Bolkiah and his brother Prince Jefri Bolkiah. Jefri left for London after his sprawling Amedeo Group collapsed under $10 billion in debt--blowing a sizable hole in the national budget. Although auditors suspect Jefri and his associates of embezzling billions from the state treasury, there was hope the feud would end when Jefri returned from London in January.

Not a chance. On Feb. 21 the government sued Jefri in Brunei High Court for the funds he allegedly ''misappropriated.'' Government lawyers then filed injunctions--in Brunei and London--freezing Jefri's assets. Now, both sides are drawing battle lines across the U.S. and Europe to fight what palace watchers in Bandar Seri Begawan, Brunei's humid capital, are calling ''the mother of all legal battles.''

That may not be far off the mark. At this point, it's not even clear how much Jefri may have siphoned off during his years as finance minister, chairman of the Brunei Investment Agency, and head of Amedeo--all hopelessly intertwined positions. The Borneo Bulletin, a Bandar daily owned by Prince Mohamed Bolkiah, another of

Jefri's three brothers, says Jefri is accused of making off with $9 billion. John M. Callagy, a lawyer at Kelley Drye & Warren LLP in New York, says it's $40 billion--and that the charges are false. Kelley Drye represents Amedeo Hotels Ltd., one of 68 companies the government contends Jefri controls.

Urgency. There's some urgency to all this. For one thing, Brunei (population 300,000) needs the missing billions to help recast its economy. In February, the Brunei Economic Council, headed by Mohamed, issued an economic diversification plan and warned that with dwindling reserves, the sultanate's dependence on oil--even amid rising prices--is ''unsustainable.'' For another, the sultan wants the mess cleared up before November, when Brunei hosts a regional summit that is to include President Clinton and the Japanese Prime Minister. ''They're anxious to settle,'' a diplomat in Bandar says. ''They want to improve their image.''

That won't be easy. In 16 months of negotiations before Jefri returned, the sultan insisted that his errant sibling unload a pile of assets that includes everything from Old Master oils to a global hotel chain and a yacht. But Jefri hasn't parted with much. Many of his baubles, palace watchers say, are too vulgar to fetch anything close to what the prince paid. In the case of Amedeo Hotels, whose properties include the New York Palace, Jefri refuses to let go.

Jefri declines to comment. But those close to the palace say his strategy is to buy time and reach a cash settlement. After the Brunei court postponed the date he has to disclose his assets, Jefri challenged the requirement. In another delaying tactic, he petitioned the Bandar court to increase his monthly allowance from $59,000 to $500,000. The court compromised at $300,000 on March 14.

Elsewhere, Jefri is trying to pry loose assets. In a suit filed in New York on Mar. 7, Kelley Drye asserts that Brunei's original court order sequestering his holdings is invalid on technical grounds. At stake, apart from the New York Palace, are the Hotel Bel-Air in Los Angeles and a Las Vegas residence. The next step, say diplomats, may be to file similar suits in Europe to block seizure of other businesses.

Although the battle has barely been joined at the Brunei High Court, palace watchers say Jefri already has a new company and hopes to get back into business. If he settles out of court, Brunei may write off many of the assets once controlled by Amedeo. That might suit the prodigal prince, but it's no way to begin rebuilding a tiny nation's skewed economy.

By Michael Shari in Bandar Seri Begawan, with Sheri Prasso in New York

May 08, 2005

Top City law firm caught up in Brunei’s missing billions

By Brendan Malkin and Dominic O’Connell

The City law firm Lovells has been dragged into the row over Brunei’s missing billions, with Prince Jefri Bolkiah, a member of the Asian state’s royal family, claiming the firm is refusing to hand over documents that could help track down some of the money.

The embarrassing dispute surfaced in a recent High Court action. Jefri is claiming he cannot disclose the full whereabouts of billions of dollars he has allegedly stolen from the oil-rich state because of a dispute with Lovells, his former English legal adviser.

Court documents also reveal that Jefri has split with his long-time right-hand man Joseph Hage, and accused him of refusing to return diamonds, whose ownership is disputed.

The documents show Jefri could face a contempt of court action in England unless he complies with Brunei’s demands for information.

The rows are the latest developments in a saga that has captivated the world for more than a decade and is now being fought out in court rooms in London, New York and Brunei.

Jefri has been accused of looting more than $15 billion (£8 billion) from state coffers, but is attempting to clear his name, arguing that his actions were taken with the full knowledge and authority of his brother, the sultan.

Jefri was until 1998 finance minister and head of the Brunei Investment Authority (BIA). Armed with the tiny Asian state’s oil riches, the royal family went on a mammoth spending spree, buying up landmark London properties and fleets of luxury cars. Jefri did little to dispel his playboy image, naming his private yacht Tits and its tenders Nipple 1 and Nipple 2.

In documents filed as part of a High Court action, Jefri’s solicitors said he could not comply with Brunei’s demands on the whereabouts of the missing billions because Lovells was withholding key documents. According to a witness statement in March from Jefri’s new lawyers, Simmons & Simmons, Lovells split with Jefri in October after “the relationship of trust and confidence ... broke down”.

The split came at a crucial time for Jefri, as the Brunei government was about to restart a legal action to force him to return assets to the state.

Lovells had since “exercised a lien over the papers it holds in respect of Jefri”, the statement said. The law firm would not hand them over until it was given £300,000 in unpaid fees, from funds that it could be sure were not subject to legal action, the statement said. Lovells refused to comment.

The witness statement claimed that Jefri split with Hage last year. “Mr Hage was asked to resign his position as attorney for Prince Jefri and currently disputes exist between Prince Jefri and Mr Hage as to his management and stewardship of a number of assets held on behalf of Prince Jefri.”

Hage said yesterday in a statement from his lawyers: “Mr Hage worked for Prince Jefri from April 1999 to August 2004, at which time he resigned of his own volition. He was not asked for his resignation or required to resign.”

A letter cited in the witness statement, from Faith Zaman, who now holds power of attorney for Jefri, claims Hage “had in his possession diamonds, the ownership of which is in dispute between the BIA and Prince Jefri. Mr Hage, through his American lawyers, was refusing to transfer custody of the diamonds to either Prince Jefri or the BIA in light of the continuing dispute as to ownership.”

In the New York court action, Jefri claimed he had sent representatives to the Palace Hotel, another disputed asset. “Prince Jefri alleges ... he suspected misappropriation of the hotel’s funds.”

In a High Court hearing on March 15, Mr Justice Blackburne was told that Jefri had been threatened with a contempt of court action. James Lewis QC, acting for Jefri, read out a letter in which the Brunei government said it had “further enforcement procedures” available to it.

August 17, 2001

Brunei: From Oil Rich to Garage Sales

By Seth Mydans, New York Times

It might seem hard to fritter away $15 billion, but apparently with a little perseverance, there's nothing to it.

With nobody seeming to notice, Prince Jefri Bolkiah, 48, favorite brother of the sultan of Brunei, shoveled away at the cash reserves of this tiny, oil-blessed sultanate for years until, two years ago, he got to the bottom.

His formula: building palaces, apartment complexes and marinas; buying luxury hotels, thousands of cars and dozens of aircraft; and supporting a large, jet-setting retinue of wives, mistresses and 35 children.

Hit hard by the Asian economic crisis in 1997, a drop in oil prices and now by Prince Jefri's extravagance, Brunei -- head for head one of the most affluent nations in the world -- is suddenly waking up from its swoon of abundance and wondering how it will support itself.

Even the most optimistic of its 330,000 citizens acknowledge that this little nation on the northwest edge of Borneo will never be the same. It is going to have to start working now to live in the real world, like other countries.

The saga of the profligate prince is just the latest cautionary tale about the dangers of an economic windfall. Among others, Nigeria, like Brunei, has been all but ruined by the corruption spawned by a discovery of oil.

Brunei's collapse was made explicit this week with a six-day auction of the depleted assets of the prince's construction and supply company, Amedeo Development Corporation, which went bankrupt in 1998. The auction of 10,000 items hardly made a dent, ending today with total sales of $7.8 million.

The scene was far from glamorous.

Gathered in a cavernous plaster factory on the company's grounds, sweating bidders could hardly hear the auctioneer over the sound of huge fans as they picked apart what was left of Amedeo.

Others were led around the company's grounds by auctioneers, buying huge pallets of teak and mahogany and a state-of-the-art marble factory along with its inventory of 8,000 tons of fine marble slabs.

''This is clearly a bit hilarious,'' said Ignatius Stephen, director of BruDirect.com, a local Internet magazine, ''the mighty affairs of Prince Jefri ending up in a plaster factory.''

But by now, such a scene was no surprise. ''It's all been a bubble,'' Mr. Stephen said. ''It's so depressing. Everything in the country is run down. People are living on borrowed money, and that bubble is going to burst too, sooner or later.''

On sale were the fixings of the luxury homes, apartment towers, shopping centers and yet one more palace that now stand half finished in huge cleared swaths of jungle. Everything from crystal chandeliers and gold-trimmed Jacuzzis to pizza ovens and gym equipment was up for grabs.

For Bruneians, the scandal has been an eye-opener. For decades they have lived comfortably on the crumbs from the sultan's fortune, enjoying free education, medical care and amusement parks, as well as high employment in the oil and gas industry and in the prince's projects. Nobody paid taxes.

In exchange, they were happy to let the royal family indulge itself with polo and parties, race horses, yachts and hundreds of Rolls-Royces and a constant stream of visiting starlets and beauty queens. The prince built a gigantic hospital catering mostly to the royals, as well as a modern sports stadium, a convention center and a $1 billion hotel and resort.

The family owns the Bel-Air Hotel in Los Angeles, the Dorchester Hotel in London and the Plaza Athénée Hotel in Paris.

Until the recent economic crash, Sultan Hassanal Bolkiah, 54, was rated as the world's richest person, with a personal fortune estimated at more than $40 billion. That may have shrunk by as much as three-fourths.

A decades-long state of emergency kept the population in its place, and it was a criminal offense to disclose information about the scope and management of the royal fortune.

As a result, most people now look on in wide-eyed silence.

Everybody knew that the sultan had delegated financial management to the prince, giving him the dual positions of finance minister and head of the Brunei Investment Agency, which had the task of investing the huge oil wealth.

But only recently have they learned what he was doing with it. At the auction, Bruneians who had never been allowed inside his palaces and playgrounds had a chance to view their anatomy.

There were mounds of baubles from the London jeweler Aspreys, gold-plated toilet brushes, a 12-foot-high bronze rocking horse, two antique cannons, fine china bearing the royal seal, the machinery to operate a bowling alley and an inventory of grand pianos.

But those were just the fun things. Palaces and resorts are not just marble and mirrors. The auction was an inventory of the nuts and bolts of the high life.

There were waste paper baskets in bulk, water tanks, compressors, dry cleaning units, floor polishers, lampshades, ashtrays, electric saws, office equipment and bathtubs.

Three snooker tables went for $7,060, a 21-foot-long dining table for $20,000, a Fuji photo processing laboratory for $10,000, a shed full of toilet bowls and pipes for $1,176.

As the auction ended, two Mercedes fire engines, a trove of chandeliers and ornamental lampposts and simulators for a Comanche attack helicopter, an Airbus A340 and a Formula One racing car were still available through private tenders.

When asked, the auctioneers said they had no idea what Prince Jefri intended to do with the simulators.

Once upon a time, hundreds of years ago, Brunei was a powerful nation, controlling much of Borneo as well as the Philippines. The sultan is the scion of one of the world's oldest continually reigning monarchies, dating back almost 600 years.

Oil was discovered in the 1920's, and when Brunei became independent from a century of British rule in 1984, it was ready -- financially if not politically -- to fend for itself.

Mostly it sat back and let specialists from Royal Dutch/Shell Group extract the wealth -- some 350,000 barrels of oil and natural-gas equivalent a day -- and pass on the profits.

Brunei's scandal is in one way a family dispute, brother against brother. Like many such disputes, the catalyst is money, on a very grand scale.

Early last year, the sultan sued his brother and impounded his passport. Three months later, they settled, with the prince promising to give back all his assets and agreeing to live on a monthly allowance of $300,000. He had told a court that he really needed $500,000 to maintain his living standards.

He is not here in Brunei now to witness the dismantling of his corporation. He has chosen to spend his allowance in London and Paris, where he has not spoken publicly about his comedown.

The country he has left behind is now trying to put itself back together in a new form.

Last year a government commission issued a dim assessment of the future.

''There are warning signals of fundamental economic problems which threaten to undermine the prosperity and with it the social stability enjoyed by the people of Brunei,'' it said.

Putting into formal language what everybody now knows, it warned that continued prosperity ''can no longer be taken for granted.''

From corner shop princess to billionaire wife

March 16, 2008

By Jared Savage

Her parents owned a corner dairy - now Claire Kelly is living the lifestyle of the rich and famous as the wife of a royal billionaire.

Nearly a decade ago, the Taranaki woman, now in her mid-30s, packed her bags for the bright lights of Paris and later married playboy Prince Jefri Bolkiah, a Brunei royal with a penchant for fast cars and flash houses.

The former model became his fifth wife - the 53-year-old has two others and has been divorced twice - and is happily married with two young children, living in a London mansion "the size of Eden Park".

But despite once being one of the wealthiest men in the world, Prince Jefri has told the Wall Street Journal he fears becoming homeless and forced into bankruptcy.

He's locked in a legal battle with his elder brother Hassanal Bolkiah, the Sultan of Brunei, over claims he funded his playboy lifestyle with $18 billion from his homeland's royal treasury.

Little has been revealed of his wife. Even Time and Forbes magazines failed at attempts to write a profile piece after the birth of the couple's first child.

"She has been kept very secret," said Wayne Tempero, one of Prince Jefri's New Zealand-based bodyguards.

"These people have got a lot of money and when they want things hidden, it's not a problem for them.

"Her children are now royal family. Everything is done to protect them."

But today the Herald on Sunday can reveal fresh information about Kelly's Kiwi beginnings.

Her parents ran the 4 Square franchise at the Moturoa Dairy in New Plymouth.

A pretty and popular pupil at New Plymouth Girls High in the late 1980s, Kelly showed talent in dance, music and drama.

A member of the senior debating team and a gifted performer in school productions, Kelly was a polished pianist who once shared the stage with virtuoso Richard Clayderman.

"She was an incredible piano player, an absolute genius," remembered Sarah O'Sullivan, a high school friend.

"I can see how a Prince would find that endearing."

That and her natural beauty.

With "amazing" blue eyes and dark hair, Kelly had plenty of fans at neighbouring New Plymouth Boys High.

"She had an incredible smile, she was a stunner. But Claire was a lovely girl too, not stuck up at all," remembered one.

After finishing school, she left New Plymouth to pursue double degrees in drama and music at the University of Auckland.

Her modelling career took off after she signed with 62Models in the early 1990s.

She quickly became the face of household products, appearing in magazine and television adverts and gracing the cover of She magazine.

A regular at the trendy Les Mills gym in downtown Auckland, Kelly moved to Paris on her OE and got a job chaperoning the Sultan of Brunei's wives.

One of the perks of hobnobbing with the rich and famous was to live in a royal palace on Champs Elysees.

That's how she met Prince Jefri, whom she married five years ago.

Schoolfriends contacted by the Herald on Sunday were "not at all surprised" Kelly married into royalty.

"Of all the people who we went to school with, she would be the one," said Karen Reiser.

"You could imagine her in that lifestyle. She was naturally beautiful and a really lovely person. Claire was always smiling and happy and treated everyone the same. Nothing fazed her."

Another schoolfriend, Angelique Bolger, the niece of former PM Jim, last saw Kelly in the lift of the Heritage Hotel in Auckland in January - on an advertisement for the hotel bar.

"Her story is phenomenal, but so is Claire," Bolger said from Australia yesterday. "If anyone was going to do it, it would be her. She's beautiful but a beautiful person too."

The Herald on Sunday traced Kelly's parents to Auckland's North Shore but they refused to comment on their daughter's rise to riches.

Since marrying the Prince and raising their children, she spends most of her time at luxurious homes in Paris or London, where armed guards patrol the perimeter of St John's Lodge in exclusive Regent's Park.

Prince Jefri cemented his playboy status with a massive spending spree during his time as Finance Minister of Brunei from 1986 to 1998.

He bought mansions around the world, 1700 luxury cars, 17 aircraft, hoards of jewellery and a fleet of yachts - including a 60m superyacht he called Tits.

The Sultan accused him of funding the spree using Brunei's money channelled through an investment agency into his Amedeo Development Corp, which went under in the 1998 Asian finance crash.

He dismissed Prince Jefri from his official position a decade ago and has since won a string of legal battles against him. In 2000, Prince Jefri agreed to settle misappropriation charges out of court to avoid criminal prosecution and agreed to hand over nearly all his wealth - although the Brunei Government agreed to set up a $200 million trust account.

Since then the Sultan's advisers have started legal proceedings to evict Prince Jefri and Kelly from their London home.

Billions Later, Jefri’s in a Royal Mess

By Mark Maremont, The Wall Street Journal

March 01, 2008

London -- Prince Jefri Bolkiah of Brunei once was one of the wealthiest men in the world. Now he’s worried he may soon be homeless and forced into bankruptcy.

“They want me to give it all back,” he says, flanked by giant Dutch landscape paintings and billowing gold drapery in the cavernous living room of his London villa, where he resides with one of his three wives and two of his 18 children. “We don’t know where we are going to live.”

The 53-year-old younger brother of the Sultan of Brunei, Prince Jefri is on the losing end of one of the world’s most colorful family feuds. It started a decade ago, when the prince was stripped of his government roles and later accused by Brunei authorities of misappropriating $14.8 billion of the royal treasury’s money.

He denies that, but there’s no doubt much had been expended on Prince Jefri’s famously sybaritic lifestyle. The jet-setting prince bought mansions around the world, amassed a fleet of 1,700 luxury cars and acquired a 180-foot yacht that he named using a slang word for female breasts.

The Sultan since then has waged a legal siege on three continents to reclaim Prince Jefri’s considerable riches. The Sultan scored a decisive victory late last year, when Britain’s Privy Council — which hears final legal appeals from Brunei, a former British protectorate — ruled that the prince needed to abide by a 2000 agreement to return nearly all his remaining holdings.

On Tuesday, Prince Jefri effectively lost control of his most valuable remaining asset, the New York Palace Hotel, an opulent 55-story property formerly known as the Helmsley Palace. The Brunei government took ownership of the hotel following a New York court order. But the judge has restricted it from selling the property pending the outcome of further proceedings and the prince is disputing the change in control.

“Brothers should get along with each other,” the New York judge, Justice Helen Freedman, admonished the lawyers for the warring royals at a recent hearing. Justice Freedman jokingly threatened to refer the case to a domestic-violence court.

Wealthy families often have squabbled over money. The Koch brothers of Kansas spent years in court in the 1980s and ’90s, battling over their family’s giant oil pipeline concern. In 2001, Chicago’s Pritzker family decided to divvy up its $20 billion fortune after a bitter dispute among siblings and cousins. But Prince Jefri’s experience represents one of the largest fortunes ever lost.

In the New York hearing, one of Prince Jefri’s lawyers, Philip Le B. Douglas, likened the idea of Prince Jefri working for a living to Russian aristocrats who “froze to death” after being forced to sweep the streets without winter clothes following the 1917 revolution. The prince, Mr. Douglas said, “has had unimaginable wealth all of his life. Now he’s going to go and bus tables?”

The Sultan’s advisers have started legal proceedings to evict Prince Jefri from his London mansion, and the sides continue to wrangle over the fate of the Hotel Bel-Air, an upscale property in the Los Angeles hills still controlled by the prince.

“I spend too much time with lawyers,” sighs Prince Jefri, a trim, soft-spoken man with a dapper moustache. He says he’s “more or less agreed” to turn over the various assets, but is still hoping his brother the Sultan will let him keep enough money to maintain a more modest version of his prior lifestyle.

The government of Brunei doesn’t seem inclined to go along. “Prince Jefri signed an agreement and he should stick to it,” says Lindsay Marr, a London-based attorney for the Brunei Investment Agency, a government-owned fund. “Why should he be allowed to keep a large amount of money that wasn’t his in the first place?”

Prince Jefri already has turned over billions of dollars worth of property, including the Plaza AthÃ©nÃ©e hotel in Paris, the giant yacht, the car collection, and more than 100 paintings by Picasso, Renoir, Modigliani and others. Late last year, he surrendered five rare diamonds, secured in a London vault, valued at roughly $200 million.

Situated in southeast Asia, Brunei is a small, oil-rich nation of 374,000 people on the northern coast of the island of Borneo, surrounded by part of Malaysia. The Sultan, Hassanal Bolkiah, is an absolute monarch who has ruled the Islamic enclave since 1967. Forbes ranks him as the world’s wealthiest ruler, with an estimated fortune of $22 billion.

Prince Jefri — whose full name is Duli Yang Teramat Mulia Paduka Seri Pengiran Digadong Sahibul Mal Pengiran Muda Haji Jefri Bolkiah — is the youngest of the Sultan’s three brothers. For many years, he was finance minister and chairman of the Brunei Investment Agency, which is charged with investing much of the country’s wealth. Under Prince Jefri, some of the BIA’s money went to improving infrastructure, he says.

But much of the BIA’s money went to Prince Jefri. According to court documents, the prince spent $475 million on Rolls Royce cars, $78 million at Italian sports-car company Pininfarina SpA, and $900 million at British jeweler Asprey. He liked Asprey so much that in 1995 he bought the company, for $385 million. A firm owned by Prince Jefri paid $202 million for the Helmsley Palace hotel in 1993, using BIA funds.

The Bruneian royal aircraft fleet — split between the Sultan and Prince Jefri — contained 10 jets, including a Boeing 747 and an Airbus A-340, according to 1996 insurance documents. A 45-page list of individual recipients shows that scores of people benefited from Prince Jefri’s generosity, from ministers to royal relatives to servants. One of Prince Jefri’s fathers-in-law received $23 million in BIA funds; his badminton coach and acupuncturist each were paid $1.8 million.

Prince Jefri also amassed a world-class art collection. Under his tenure, the BIA paid $24 million for a Manet and $20.5 million for a Renoir, according to records filed in British court. The prince’s favorite, though, was Edgar Degas: “I like the brilliant color and heavy stroke,” he says. He bought at least 21 paintings by the French Impressionist artist, according to court documents.

Prince Jefri seems bewildered by the accusation that he misspent $14.8 billion. “It’s not that easy to hide,” he says. “I keep asking the lawyers, ‘Where did it go?’”

Some of the Rolls Royce cars, he says, were used as a kind of “transport pool” for the 20-odd royal guest houses in Brunei. “We’d provide our guests with a car and a backup car, so they didn’t have to rent from anybody.”

The prince says his brother the Sultan was aware of much of the spending. For example, Prince Jefri says he spent several years building himself a sprawling beachfront palace in Brunei, with a sports complex. “He knew it was built,” the prince says. “My civil list [government allowance] is only $20,000 U.S. per month. You can’t build a house for that.”

Prince Jefri says the Sultan would sometimes come over to his palace after one of their frequent badminton matches, and admire a newly-bought Picasso or Degas on the wall. “He’d say, ‘Nice painting. Could you transfer this today?” to the Sultan’s own palace — a 1,788 room edifice that covers 49 acres.

Messages sent to officials in Brunei and its embassy in Washington seeking comment weren’t returned.

In 1997, depressed oil prices triggered a financial crisis in Brunei. The Sultan’s people brought in Arthur Andersen accountants to comb through the investment agency’s books, leading to Prince Jefri’s ouster.

Prince Jefri doesn’t deny spending some of the BIA’s money, but claims in court documents that the Sultan also received billions of dollars in “Special Transfers” from the government agency to his personal bank accounts. Britain’s Privy Council, in its ruling last year, put the total at $8 billion.

At one point, Prince Jefri said in an affidavit, the Sultan asked him to set up a bank account under a pseudonym, “so that the monies would not be traced to His Majesty or [appear] to have originated from the BIA.” The prince said that $700 million was transferred to the Sultan this way in a single transaction.

Responding to Prince Jefri’s allegations about the Sultan’s finances, a lawyer acting for the Brunei government said in a 2005 affidavit that they were “irrelevant” and didn’t constitute a defense against claims that the prince had purchased assets for his own benefit with state funds.

In May 2000, Prince Jefri agreed to settle the misappropriation charges that Brunei brought against him, avoiding any possibility of criminal prosecution. In return for the prince’s agreement to hand over nearly all of his wealth, the government pledged to let Prince Jefri keep an official and a private residence in Brunei, and agreed to set up a $200 million trust fund to cover certain of his liabilities, but not his living expenses.

Both sides accuse the other of breaching the pact. The Brunei government says Prince Jefri has refused to return the most valuable overseas possessions, including the London villa, a sumptuous residence in Paris’s Place VendÃ´me, a Cayman Islands trust fund with more than $100 million in cash, and the two U.S. hotels. In total, the assets likely are worth more than $1.5 billion.

Prince Jefri says he shouldn’t have to surrender those assets until he’s sure the Brunei government will live up to its end of the bargain. The government currently controls his homes in Brunei, and there is a dispute over which ones it is obliged to return to the prince. He maintains that his official residence is the beachfront palace he built, known as Assana. The Brunei government disagrees, saying a smaller residence is the prince’s official one.

In any case, Prince Jefri says regaining the Brunei palaces won’t do him much good. In exile since 2004, he says he can’t return to his native land and “it’s hard to sell that kind of house in Brunei.” He’d rather have their value in cash.

Prince Jefri also worries about whether the Brunei government will live up to its promise to pay a big capital-gains tax due from the transfer of the New York Palace Hotel. “I will probably have to go bankrupt” if it doesn’t, he says.

Mr. Marr, the London lawyer, says the Brunei government is obliged under the settlement to cover those taxes “and intends to do so.” He also says he knows of no reason why Prince Jefri can’t return to Brunei.

Prince Jefri’s living expenses are considerable. He’s married to three women and divorced from two others. His fifth wife, the former Claire Kelly, is a New Zealand native. They have two young boys, who live with their mother in St. John’s Lodge, the London villa.

Prince Jefri says he worries about paying for the studies of his many children, some of whom are studying abroad. “Some of the mothers will be able to afford the children, some not.” Court records say that his first four wives received a total of $158 million of BIA funds over the years, although the Brunei government may have reclaimed some of that.

Asked how many mothers there are, the prince starts ticking them off: “There’s one in Singapore, one in the Philippines, one in England, one in Las Vegas….” He counts seven in all. “I just want some income to move on and look after the children,” he says.

On a recent day, Prince Jefri gives a tour of St. John’s Lodge, an imposing white villa dating to the early 19th century, situated inside Regent’s Park. The prince’s polo boots and mallets are laid out on the table in the formal dining room, which could easily seat 40 people. A child’s train set has taken over a sitting room, and strollers are pushed to a corner in the magnificent front hall, where a bodyguard hovers. Portraits of the Sultan and the Sultan’s wife sit on a side table.

“It’s just a matter of time” before the family has to leave, the prince says.

While in Brunei, Prince Jefri says his favorite car to drive was a Ferrari 550, a sleek sports coupe that he would take for a spin late at night when the roads were quiet. Now, he says, “I like the Mini.” He drives a black one around London.

The Sultan of Brunei - Turning Up the Heat

October 26, 2007

The problem with life is that it often moves from one catastrophy to another. Christmas mid nineties was one such disaster at the Hilton Park lane. I was from a small down on a big offer run by the Hilton. It was going to be fun and exciting apart from the fact that the Sultan of Brunei was staying there as well.

Turning up the heat

The problem was that the Sultan and his family took up the entire resources of the Hilton. So much so that the rest of us mere mortal had to freeze our butts off in the middle of winter using hot water bottles and fan heaters. The Sultan had taken up the entire floor above us. His family took up the entire lift each time I attempted to make it downstairs for food and sustenance forcing me to wait forever. Then there was me in the lift with the Sultan himself. At the time, I didn't know who he was and I told my friend on my way out" Ain't he short," I said. Indeed, the Sultan is short. The concierge politely reminded me that he was the Sultan.I was told he was a short man with big pockets. I spent the entire few days sneering at the Sultan and his family while being forced to dress in a selection of woolies and watching my teeth chattering. I was a little tired of the fact that all resources were diverted to him while I was just there to freeze. I believe I have never been so annoyed with someone as I was with the Sultan. Of course, minions like me don't have the right to be annoyed, we just have the right to freeze. Infact, I recall the end of the hotel stint and being amazingly happy in a train back home. At least it was warm.

I am forced to tell this story because I nearly dropped the paper this morning while reading the details of the Sultan's lifestyle. Short stuff is certainly incredibly rich, the Telegraph revealed "The Sultan of Brunei, who is embroiled in the most expensive family feud in legal history, transferred $8 billion (3.9 billion) of state funds into his personal bank account to help fund his lavish lifestyle, The Daily Telegraph can reveal" . Yep, thats a lot of zeros. The paper went onto say "He and his younger brother Prince Jefri have been involved in an extraordinary dispute over money which has lasted for almost 10 years — and which is likely to end with a legal bill of 200 million. To help it reach a decision, the Privy Council ordered the sultan to open his books to the court". How could anyone end up with a legal bill like that? I was wondering whether the two boys could stop scrapping and take their bats and balls home so that we can all squabble over normal amounts of money.

"The payments, totalling 19.5 billion, include 1.25 million to masseuses and acupuncturists; 7.3 million and 6.59 million to two house supervisors; 1.26 million to a badminton coach and 5.86 million to each of his five public relations officers, listed as Yoya, Prall, Vicky, Shelly and Janet" . Some people just have tooooo much money. Who pays that much money on hitting a shuttlecock? I was wondering whether anyone has taught the Sultan the art of saving his money or spending wisely.

I was also wondering whether he would have kindly been generous enough to arrange a heater for me at the Hilton itself all those years ago. 14.99 Argos Deal at the time :) !

The man who pays his cleaner £7m

PS.. Dear Sultan of Brunei, any jobs going?

By Beth Neil And Gary Anderson

October 26, 2007

You'd expect one of the world's richest men to have a luxury car. And naturally he'll live in a sprawling mansion, own a yacht or two and fly by private jet.

But the Sultan of Brunei's spending habits go way beyond that.

In fact, an astonishing court case this week revealed financial excesses that make Elton John look like a miser.

Court papers revealed that 61-year-old Haji Hassanal Bolkiah paid £1.26million to his badminton coach, and £1.25m for acupuncture and massage.

He even spent nearly £50,000 on guards for his collection of exotic birds.

But by the standards of the Sultan's staff, that's practically minimum wage.

His five-strong PR team collected a total of £29.3m. And two housekeepers were each paid around £7m.

The eye-popping figures were exposed during a bitter legal battle with his brother Prince Jefri.

A legal source said: "I don't think the Sultan would have planned for this information to be made public.

"The figures we are dealing with are absolutely mind-boggling."

The 50-page list of payments - which totals £19.5billion - also reveals that over four years nearly £4bn of state funds was paid into his account to bankroll his lifestyle. That's more than oil-rich Brunei's entire GDP.

But what a lifestyle. He is believed to own a fleet of 5,000 luxury and sports cars and his own private Boeing 747-400 worth £115m.

He shares a 1,788-room palace with Queen Pengiran Anak Hajah Saleh, who he married in 1965, and HRH Pengiran Isteri Azrinaz Mazhar, 29, who he married in 2005.

The family also has lavish homes in London, LA, New York and Paris.

Details of the father-of-11's finances have become public thanks to the most expensive family feud in legal history.

The Sultan, who has ruled as absolute monarch for 40 years, and his brother have been embroiled in a legal battle for 10 years-lawyers' bills alone stretch to £200m.

The Sultan claims his younger brother siphoned off £8bn during 13 years as finance minister and is now claiming the prince has failed to repay the £3bn which was agreed in an out-of-court settlement back in 2000.

The prince, on the other hand, is appealing the embezzlement allegations and maintains the Sultan has reneged on a deal over which assets he could keep. He also reckons he can never receive a fair trial in Brunei.

The Sultan, a Sandhurst graduate, has rewritten his country's constitution to say: "His Majesty the Sultan... can do no wrong in his personal or any official capacity."

It also warns against taking the Sultan's name in vain in any court.

Brunei was ruled by Britain before gaining independence in 1984, and The Privy Council - which sits in Downing Street - is still the superior court and will rule on the row later this month.

But win or lose, with a personal fortune of around £10bn, the Sultan won't need to cancel those badminton lessons just yet...

Brother's £3m a week

According to court documents, Jefri was at one time spending up to £500,000 a day. Some of his possessions auctioned off in 2001 to settle outstanding debts included:

7,000 tons of marble - marble Jacuzzis Airbus A340 aircraft cockpit simulator gold toilet-roll holders

How world’s richest man spends his cash

Property

1,788-room palace, six-star hotel, climate controlled stables for his 200 polo ponies, five aircraft hangars to house his 5,000 cars, a theme park

£5m What Michael Jackson was reportedly paid to attend the 25th birthday party of Prince Azim earlier this year

Staff wage bill

£1.25million to masseuses, acupuncturists

£13.9million to housekeepers

£1.26million to badminton coach

£5.86million to each of his five PR officers

£48,859 to guard his exotic birdcages

Luxury cars

531 Mercedes

367 Ferraris

362 Bentleys

185 BMWs

177 Jaguars

160 Porsches

130 Rolls-Royces

20 Lamborghinis

Other transport

Two Boeings, including a 747-400 jumbo jet, one Airbus, six smaller planes, two helicopters.

Feuding sultan's secret billions exposed

By Andrew Pierce, London

October 24, 2007

The Sultan of Brunei, who is embroiled in the most expensive family feud in legal history, secretly transferred $US8 billion ($A9 billion) of state money into his personal bank account.

The money, which exceeds Brunei's entire annual gross domestic product, was paid in over four years.

It funded an extraordinarily lavish lifestyle, which included spending $100,000 on guards for the exotic bird cages at his palace.

The Sultan is suing his younger brother, Prince Jefri, whom he accuses of embezzling $8 billion during the 13 years that he was finance minister of the oil-and-gas-rich state.

The Sultan has alleged that Prince Jefri has failed to repay all of the $6 billion that was agreed to in an out-of-court settlement.

However, the court proceedings have shed light on the Sultan's own finances.

The admission of the transfers to his personal accounts had to be made in documents lodged before the Privy Council in London, which will rule at the end of the month on an appeal by Prince Jefri that he can never receive a fair trial in Brunei.

The Sultan is an absolute monarch and controls every aspect of life there. The papers supplied by Freshfields, the London lawyers who act for the Brunei Investment Authority, which reports to the Sultan, include a 50-page list of monetary gifts to hundreds of those lucky enough to be the beneficiaries of the Sultan's largesse.

The total bill was $40 billion.

The gifts included $2,570,050 for masseuses and acupuncturists; $14,955,000 for a house supervisor in Singapore and $13,500,000 for a second house supervisor; $2,580,350 for a badminton coach; $12,000,000 for each of his five public relations officers listed as Yoya, Prall, Vicky, Shelly and Janet.

Desmond Browne, QC, the British barrister, also appears on the gift list in the case, which will end with the biggest legal bill in British history of about $408 million. He was given $5000.

The Privy Council is sitting as Brunei's superior court, a legacy of former British rule.

Brunei was administered by the British for much of the last century, gaining full independence in 1984.

After a four-day hearing at 12 Downing Street before Lords Bingham, Hope, Mance, Neuberger and Scott, the Privy Council reserved its judgement of Prince Jefri's appeal until later this month.

Even Though Brunei Has a Few Embarrassments Amid the Asian Crisis : The Sultan's Birthday Party Will Go On

By Thomas Fuller

July 15, 1998

Bandar Seri Begawan, Brunei: Workers in bright orange uniforms scrubbed the streets and sidewalks of this oil-rich town Tuesday, the eve of lavish birthday celebrations for one of the world's richest men.

The Sultan of Brunei turns 52 on Wednesday, and this country of 300,000 plans to celebrate as it always has: with a month of parties and nightly concerts.

All of this might not have raised eyebrows in years past. But this year's festivities take place against a particular backdrop. Reports have surfaced in the past few weeks of billion-dollar losses at one of Brunei's largest companies. The price of oil — the very foundation of the economy — has plummeted by 40 percent in a year. And, not least, Brunei's neighbors are engulfed in the regional economic crisis.

"We are in full recession," said a Western banker in Brunei who did not want to be named. "I'm not sure the priorities are set the way they should be."

During the boom years, this country's flamboyance — the royal family's palaces, parties and private jets — fit with the rising economies of Asia and their unabashed appetite for luxury goods. But the party is over for most of Southeast Asia, and now Brunei appears out of step.

While Indonesian leaders talk of democratic reforms, Brunei remains officially under a state of emergency that was declared in 1962. (The country's brief flirtation with democracy ended with its last elections, held in 1968.) As Thailand restructures its financial sector, in Brunei it is still a crime publicly to estimate the country's international currency reserves — a crime punishable by three years in prison.

Bankers and diplomats here say Brunei's finances are so opaque that only a handful of top advisers to the Sultan know what belongs to the family and what belongs to the state.

"In terms of constitutional history, Brunei is somewhere in the early Tudor period, between Henry VII and Henry VIII," says Al Troner, managing director of the Asia Pacific Energy, a consulting firm. "There is no clear separation between the privy purse and the national treasury."

The government issues little in the way of economic data, making it difficult to tell if Brunei is indeed in recession.

When times were good and oil prices were high, financial and political transparency — the watchword of the current economic crisis — did not seem to matter much.

But in the wake of the spectacular collapse of Amedeo Development Corp., a company run by the Sultan's jet-setting younger brother, Prince Jefri, banks and contractors are begging for clarity.

Four years ago, Prince Jefri convinced the Sultan that he could transform this sleepy town of just 60,000 people into a First-World capital. He formed Amedeo and installed his son, Hakim, a teenager at the time, as managing director.

The company took on large infrastructure projects: a five-star hotel, a hospital, an amusement park and an international school. Overseas, Prince Jefri bought a host of luxurious hotels: the Dorchester in London, the Plaza Athenee in Paris, the Beverly Hills and Bel-Air hotels in Los Angeles, and the Palace in New York.

He also took over the company that supplies jewelry to Britain's royal family, Asprey PLC.

Analysts here said the trouble with Amedeo began last year, when contractors began reporting that they were not being paid. But it was not until earlier this year that the Sultan ordered an audit of the company's books. The palace has been tight-lipped about the scandal, saying only that an investigation is under way. Bankers and businessmen say the Sultan may divulge more information on Amedeo during his birthday speech.

Prince Jefri, meanwhile, is said to be out of the country and, according to several accounts, out of favor with the Sultan.

Amedeo's total losses have been estimated at as high as $16 billion, but no official figure has been given by the palace.

What is certain is that companies that worked with Amedeo are now owed tens of millions of dollars . One of the biggest contractors here said he was owed more than 80 million Brunei dollars ($47 million).

Although many of these projects were viewed as public works, the government has said that it will not honor Amedeo's debts.

"Amedeo should deal with its own problems," Ismail Damit, Brunei's minister of national development, said recently.

The government's stand has left the bankers and contractors involved feeling duped.

"When people did business with Amedeo, they thought they were dealing with His Majesty," said the Western banker. "This will hurt the image of Brunei and the image of the family."

As it is, the royal family's image outside the country is not quite what it might wish. In the United States, the family made headlines when Shannon Marketic, a former Miss U.S.A., alleged that during a visit to the Sultan's palace she was sexually abused. (A court in America last year ruled the Sultan was immune to prosecution.)

Among Brunei's citizens, who often learn of these and other alleged scandals from the Internet — the local press does not cover such things — there seems to be a collective shrug.

Referring to Prince Jefri, one of the government's critics, Mohammed Hatta Zain al Abidin, said: "If he's a real Muslim, whatever he has done is between him and God."

This nonchalance is often attributed to the comfortable life that Brunei's citizens lead, sometimes called "Shellfare." (The Royal Dutch/Shell Group is the country's second-largest employer, after the government.) Brunei's citizens are given free medical care, pay no income tax and enjoy such privileges as free access to a large amusement park outside Bandar Seri Begawan.

Business related to oil and gas, which makes up at least 80 percent of total economic output, will not disappear any time soon. Mr. Troner of Asia Pacific Energy estimates that at current production levels Brunei has at least 25 to 35 years of gas left and at least 20 years of crude oil.

"Whatever the family does is their business," said a foreman at the Public Works Department on Tuesday as he helped prepare for the Sultan's birthday parade, "as long as we receive our money every month."

July 05, 1998

Playboy Prince Jefri is hit by the £10bn collapse of business empire

By Neil Bennett, The Telegraph

The Sultan of Brunei has ordered a worldwide investigation into the financial affairs of his brother Prince Jefri Bolkiah, whose flagship investment company has collapsed with losses estimated at up to £10 billion.

The Sultan, widely held to be the richest man in the world, has drafted in top financial experts, including accountants from Price Waterhouse, to discover the full extent of his brother's losses. This follows the failure of Amedeo, Prince Jefri's construction and investment group.

Amedeo has debts of hundreds of millions of pounds and dozens of British suppliers have not been paid for more than a year. The head of one firm, which is owed £500,000, said his company faced a struggle for survival without the money. "When you are working for the brother of the richest man in the world, you expect to have your bills paid,' he said.

The 51-year-old Sultan is said to be furious with his brother. Prince Jefri's fleet of jets is said to have been impounded at Brunei and many are now up for sale. The Sultan is also determined to track down the senior managers of Amedeo, who have all left the country. One of the sultan's close associates said: "The king is very disappointed in his brother, but he is still his brother. Emotion is still very strong between them."

Amedeo is the largest private company in Brunei. Prince Jefri, 44, is one of the world's best known playboys. At one point his wealth was estimated at £20 billion, but as much as half of that has been lost in the collapse. The exact source of his fortune is unknown, but he is believed to receive regular payments from Brunei's vast oil revenues. Some of these he spent setting up Amedeo, which the government regularly chose as its contractor on prime infrastructure developments. These were also funded by the country's oil money.

Prince Jefri used cash from Amedeo to finance a spending spree, buying some of the world's best known hotels, including the Plaza Athenee in Paris and the Bel-Air in Los Angeles, as well as Asprey, the Royal jewellers. Many of these are now expected to be sold.

Under Prince Jefri's leadership Asprey sponsored the Ferrari Formula One team, and its driver Michael Schumacher, for an estimated £20 million. Two weeks ago Asprey announced plans to merge its main store with Garrard, which it also owns, as part of a cost-cutting drive prompted by his straitened circumstances.

Prince Jefri, who was once Brunei's finance minister, owns 600 cars and a vast yacht called Tits, with two tenders called Nipple 1 and Nipple 2. He owns five houses in London and likes football so much that he once flew Chelsea to Brunei for a game against the national side. He also hired Rod Stewart to play at one his children's parties.

The Prince has four wives and three children, and regularly plays polo with the Prince of Wales. He runs his own team, Jerudong Park. Earlier this year Prince Jefri was sued for £250 million by Bob and Rafi Manoukian, two former business associates. The Prince counter-sued for more than £100 million. The brothers alleged in court that the Prince regularly entertained prostitutes in his Park Lane flat. The case was later settled out of court. In the case, Rafi Manoukian claimed that he had procured more than £500 million worth of gifts and jewellery for the Prince over 14 years, including erotic pens and watches and a jewel-encrusted bedside rug valued at £5 million.

Last week Haji Ismail, Brunei's minister of development, announced that the government was taking over some of Amedeo's key projects in the country, including a six-star hotel at Jerudong Park and several power stations that it was building with Siemens, the German industrial group. But he said that the government would not pay off Amedeo's debts. He said: "Amedeo should deal with its own problems."

He also called on Prince Jefri and his business associates to return to Brunei to deal with Amedeo's troubles and said: "I hope Amedeo is not saying, 'Forget all things and let them rot'. They can come forward and discuss what can be done. I wish I knew what is going on. I do not know what went wrong. There has been no transparency as to what has been taking place. Amedeo cannot just run away if it intends to honour its commitments. It cannot expect someone to drop from the sky to help."

The Brunei authorities are particularly keen to talk to Danny Wong, Amedeo's managing director, who is said to be in Britain. Prince Jefri's whereabouts are unknown, although one executive involved in the affair said he is holidaying in continental Europe.

The collapse of Amedeo appears to have been triggered by a sharp economic downturn in Brunei, one of the world's richest nations. This has been caused by the economic slump in the rest of Asia, which began a year ago, and the plunging oil price, which has fallen almost 40 per cent in the past year to less than $14 a barrel. Almost all Brunei's wealth is generated by its oil fields.

The Brunei government has been forced to make sharp spending cuts, reducing construction work available for Amedeo. This has plunged the group into a massive cash flow crisis. The extent of Amedeo's losses are still not clear, but locals say it could be as high as $16 billion. Others say this is an exaggeration, but the shortfall in assets could well run into billions. The group took on many of Brunei's largest infrastructure projects and was richly paid for them by the government and the Sultan. But Amedeo now has no cash to pay its suppliers, although many of its largest projects are still unfinished. These include the Datastream Technology Tower, the tallest building in Brunei.

The Sultan is due to receive a full report on the extent of Amedeo's financial woes within the next few days. Then he will decide what needs to be done. Locals expect that Amedeo will be wound up and its assets sold off to meet claims from creditors. The government is expected to resist pressure from creditors to underwrite Amedeo's vast liabilities. One associate said: "The king is not going to meet Jefri's debts."

Prince 'hosted palace sex parties'

By David Graves

The youngest brother of the Sultan of Brunei, the world's richest man, was accused in the High Court yesterday of keeping prostitutes in the former Playboy Club in London, of having nightly sex parties at his Brunei palaces and of hosting secret gambling sessions in defiance of Muslim tradition.

He was alleged to have bought the upper floors of Hugh Hefner's former club in Park Lane, London, for £21 million in 1989, two months after the property had been valued at £5 million, "to keep his prostitutes away from the public eye".

Prince Jefri, 44, Brunei's minister of finance and one of the Sultan's closest advisors, was also said to have built a string of palaces in his country, many of which were used to provide "his nightly entertainment, his sex parties" attended by up to 50 prostitutes.

Christopher Carr, QC, representing two of Prince Jefri's former closest emissaries who are suing him for £80 million, also claimed that the prince hosted gambling sessions at the former Playboy Club in secret "because it would have been frowned upon in Islamic circles".

The prince, a Muslim who has four wives and three children, had lied about buying an £895,000 blackjack table - set in precious stones with a solid gold box for cards - to protect his "appearance of religious devotion from the improper taint in a society of increasingly fundamentalist attitudes", the QC said.

The former emissaries, Bob and Rafi Manoukian, and Prince Jefri, whose brother's personal fortune is reputed to be £20 billion, are fighting what could become one of the most expensive personal actions in British legal history.

The London-based brothers, who are worth about £250 million, claim that the prince failed to honour two business deals. The prince is counter-suing for an estimated £100 million, claiming that Rafi Manoukian channelled unreasonable profits out of him through an intricate web of companies based in Liechtenstein.

The Manoukians, who specialise in property investment, claim that they fell out with the prince over their concerns about his personal lifestyle.

They maintain that he reneged on a £55 million deal to buy and operate the £190 million Adelphi office building in central London and a £25 million verbal agreement lavishly to refurbish the lower floors of the former Playboy Club. The brothers say the prince had planned to turn these into a London "palace" next to the Dorchester Hotel - which his family also owned.

Bob Manoukian, 50, and his 42-year-old brother were close friends and business partners of Prince Jefri for 14 years until 1995. During that time an estimated £520 million worth of deals were concluded by them on behalf of the prince, including the purchase of a Renoir painting, other lavish objets d'art and an aircraft.

The Manoukians were born in Armenia to a Christian family and travel on Lebanese passports, but they have lived in Britain since the Seventies. Bob Manoukian has a £12 million house in Belgravia and owns more than 60 cars, including several Rolls Royces.

Mr Carr told Mr Justice Longmore on the fourth day of the case: "If I might be allowed a little understatement, Prince Jefri is a very rich man, but the scale of his wealth is matched by his appetite for extravagance and self-indulgence." He said the prince, who has played polo with the Prince of Wales and at one time owned a fleet of 600 cars, had spent "unimaginable" amounts of money.

"The evidence will be that over a seven-year period in the late Eighties and early Nineties, Prince Jefri built a string of palaces in Brunei, consisting in all of about 40 buildings," said the QC.

Mr Carr claimed that "a substantial proportion of his extensive palatial construction in Brunei was carried out for the purpose of providing his nightly entertainment, his sex parties, attended by up to 50 prostitutes from various countries, flown into Brunei and paid, housed, clothed and bejewelled at his expense".

He said Rafi Manoukian, who travelled to Brunei once a month to see Prince Jefri, had supplied him with several hundred watches, the "vast majority" of which had been given as "gifts" to the women.

Prince Jefri, who denies the sexual and gambling allegations against him, is also being sued in America by Shannon Marketic, a former Miss USA, who claims that she was held captive in a Brunei palace for use by his friends as a "sex slave".

Mr Carr said the prince also had vast property interests around the world and at one stage appeared to have been "buying up single-handedly a significant proportion of the luxury property coming on to the London market".

The QC told the court that "this vast quantity of property" had to be fitted out and furnished with high-quality paintings and objets d'art and the prince's taste for such items appeared to be "unlimited".

He said the prince's recent purchase of Asprey, the Queen's jewellers, for £244 million, would "no doubt help to ensure a ready supply". He described the prince as a "one-man walking market" for the suppliers of luxury goods, who "flocked" to Brunei in an attempt to sell their products to him.

Mr Carr said: "It was a bizarre and, one suspects, a unique market. Back-stabbing one's competition and rivals by crude and sometimes other means seems to have been part of the natural order." He said that Prince Jefri's case against Rafi Manoukian was that he had undertaken to act solely in the prince's interests and not to make any profit out of his dealings with him, but "that was one of the most dishonest claims to ever come before the courts and is a lie".

The case was adjourned until Monday, when the judge and counsel will visit 45 Park Lane, the former Playboy Club.

August 27, 1998

The Royal Treatment; Ruling Family Feuds as Oil Income Drops in Brunei

By Mark Landler

Beneath a canopy of crystal chandeliers in a dazzling throne room here earlier this month, a gentle-looking young prince in a golden tunic was handed a jewel-encrusted dagger and proclaimed heir to the Islamic Sultanate of Brunei.

Royal succession is a serious business in this secluded, oil-rich country on the northern coast of Borneo, where Sultan Hassanal Bolkiah has ruled with absolute authority since Brunei gained independence from Britain in 1984. And never more so than now, when the Sultan is battling both a bitter family feud and a free fall in oil prices, which has thrown the fief into a financial bind.

The crowning of the Sultan's eldest son, the 24-year-old Prince al-Muhtadee Billah, was a suitably solemn affair -- steeped in six centuries of Malay tradition that gave it an almost otherworldly aura.

''We have been praying for this day,'' a young woman said after the ceremony on Aug. 10 as the Prince was drawn through the capital in a gold-and-white chariot. Like most of Brunei's 305,000 people, she regards the royal family with a reverence verging on awe. Thanks to the richest oil reserves in Southeast Asia, the Sultan has transformed his country into an enclave of docile affluence.

But the investiture of Prince Billah comes at a time of rising turmoil in this normally peaceful country, although it is still relatively unscathed by the Asian economic crisis swirling around it. The Sultan recently stripped his younger brother, Prince Jefri Bolkiah, of his posts as head of Brunei's state investment agency and its largest conglomerate, reflecting allegations that the Prince squandered billions on bad investments and a profligate life style.

Even the Sultan has come under scrutiny for living like Croesus while a decline in oil prices drains Brunei's economy. Building a 1,788-room palace with air-conditioned stables and hiring Michael Jackson to perform at his 50th birthday party was fine as long as oil sales were pumping nearly $2 billion a year into Brunei's coffers. But with oil prices down one-third since January, Brunei has already lost about $400 million, or 20 percent of its revenue last year.

Brunei Shell Petroleum, a unit of the Royal/Dutch Shell Group and the dominant oil producer, is sending home expatriate workers, while local merchants are feeling the pinch as shoppers flock to neighboring Malaysia to buy cheaper goods. Analysts say Brunei is experiencing something new in its well-lubricated history: a cash-flow squeeze.

That squeeze may force the country to cut back on entitlement programs that earned it the nickname ''Shellfare state.'' At $25,200, Brunei's citizens already have the highest per capita income in Southeast Asia. But the Government still doles out free health care and education -- not to mention subsidized rent and interest-free loans for civil servants to buy houses.

''We've been fortunate in our history because we've never had to prioritize,'' said Selamat Munap, the Deputy Finance Minister. ''We've been able to take care of our children, our sick, our elderly. Perhaps we will have to be more rigorous in our standards for Government spending.''

Mr. Selamat delicately avoids mentioning the royal family, which has taken care of itself best of all. But diplomats here say the Sultan now recognizes that his relatives must curb their lavish ways. The Sultan, they say, is particularly angry with Prince Jefri, who set off on an epic spending spree in the early 1990's, buying luxury hotels from Paris and London to New York and Los Angeles.

''There was a dawning appreciation that they were getting ahead of their earnings,'' said one Western diplomat, who, like almost everybody here, insisted on anonymity out of fear of offending the Sultan.

The extent of the rift in the royal family became clear when Prince Jefri stayed away from Prince Billah's investiture, the most important ceremony since the Sultan's coronation in 1967. Prince Jefri, who is in self-imposed exile in the United States, issued a statement that he could not return to Brunei because ''there is little I can do to oppose the destructive action of reactionary forces, which are becoming increasingly entrenched at all levels of government.''

A spokesman for Prince Jefri said Islamic fundamentalists from Libya and Iran were playing an influential role in Brunei's Government -- a contention that the Government dismisses as preposterous.

Still, with the Government starting a global investigation of the Prince, and the Prince hurling brickbats in response, Brunei is being dragged out of its velvet-lined obscurity. Before independence, it had been a British protectorate, with origins that date back to the 13th century, when a prince from western Borneo became the first sultan of this lush, heavily wooded land.

To some extent, Brunei's troubles are rooted in its most fortunate event: the 1929 discovery of oil off the coast. By 1996, Brunei was pumping 160,000 barrels a day, mostly for export to Japan. Oil and natural gas now generate 90 percent of the Government's income.

Even to people who could not find his country on a map, the Sultan of Brunei became famous as the richest man in the world. It is a title he only recently ceded to William H. Gates, the chairman of Microsoft; like other oil barons, the Sultan's net worth declines as fast as the price of crude.

With an estimated fortune that reached $35 billion in the early 1990's, the royal family has enjoyed life on a grand scale. Prince Jefri, 44, savored it with particular gusto, buying playthings like a sleek yacht, an Airbus jet, a Sikorsky helicopter and five-star hotels including the Plaza Athenee in Paris, the New York Palace and the Bel Air in Los Angeles.

Prince Jefri's ambitions extended beyond shopping. As Finance Minister from 1984 to 1996, he built, among other projects, a giant amusement park, free to visitors. Prince Jefri pursued his ventures through a web of private companies and Government agencies. The Amedeo Development Corporation, a private company owned by the Prince, built the amusement park and other projects in Brunei. Amedeo Crown, a Prince Jefri-owned company listed on the British island of Jersey, acquired Asprey, the London jeweler, while Prince Jefri family trusts own the American hotels.

The Brunei Investment Agency, a Government operation that the Prince led as chairman, manages investments and owns more hotels, including the Dorchester in London and the Beverly Hills Hotel in California.

Reconstructing what happened at these companies is difficult because their operations are cloaked in secrecy. The reputed advisers will not even confirm whether they work for Prince Jefri, the royal family or the Government.

Executives with ties to Prince Jefri said that Amedeo and the Brunei Investment Agency were both audited by the accounting firm KPMG Peat Marwick. Citibank is said to be their main adviser. Given the blurry line between the interests of the royal family and those of the state, these executives said it would be hard for any outsider to impose strict financial controls.

Last month, reports began to arise of huge, undisclosed losses at both Amedeo and the Brunei Investment Agency. Financial analysts said the investment agency's assets might have been pledged to buy hotels. The losses came as an acute embarrassment to the Sultan, who had offered loans to help his ailing neighbors, Thailand and Indonesia, only to discover that Brunei could not afford them.

So the Sultan abruptly stripped Prince Jefri of his jobs at both organizations and ordered the Government to seize Amedeo's assets in Brunei. The Sultan hired auditors from Arthur Andersen in London to calculate the losses, which some analysts say could reach billions of dollars.

Mr. Selamat, the Deputy Finance Minister, declined to comment on Amedeo's collapse but acknowledged that ''any major corporate failure is going to have some impact on the economy of Brunei.''

Prince Jefri's financial troubles came after another embarrassing episode, in which Shannon Marketic, a former Miss U.S.A., accused him and the Sultan of trying to turn her into a sex slave. The lawsuit is pending, though the Sultan has sovereign immunity and Prince Jefri has immunity as a potential heir to the throne.

Prince Jefri would seem to have a bleak future in Brunei. But he contends that because his overseas properties are owned by separate companies and trusts, he still owns those assets and intends to keep them.

''I do not seek a fight and prefer to be left alone,'' he said in a statement. ''I shall, however, vigorously defend my position and interests of my family.''

An adviser to Prince Jefri, speaking on the condition of anonymity, said the Government was exaggerating the losses at Amedeo to discredit the Prince and destroy his power base within the country. The Government also recently seized three oil concessions that gave Prince Jefri a steady stream of income.

Now the Prince and his advisers are plotting a strategy to hold on to the remaining properties. Brunei's investigation has set off alarm bells in Europe and the United States, and Prince Jefri's lieutenants have had to reassure employees and suppliers that the hotels and other properties are not about to be seized.

Prince Jefri may be finally tightening his belt, too. At Asprey Group, the venerable but money-losing luxury-goods company he bought for $388 million in 1995, the Prince is merging the flagship Asprey with its sister company, Garrard, and selling off unprofitable businesses.

''The idea that because we have a principal who is a prince, we can spend whatever our hearts desire, is not true,'' said Ian Dahl, the chief executive of Asprey in London. ''We run a very tightfisted company.''

Prince Jefri's adviser said he was being hounded by Islamic militants, including another of the Sultan's brothers, Prince Mohamed. ''This is a classic power struggle between those who favor a more conservative, religious approach and those who favor a more open, tolerant approach,'' the adviser said.

Brunei has become more straitlaced in recent years. Alcohol is no longer served in bars or restaurants. But other facts of life here may have less to do with religion than money. Several observers said the Sultan's largess had created a politically satisfied, even sedated, populace. Even people who live in houses on stilts in Brunei's 500-year-old water village own satellite dishes.

''The people feel they've gotten a good deal from the Sultan,'' said Rex DeSilva, the editor of The Borneo Bulletin, which calls itself an independent newspaper even though it is controlled by Prince Mohamed. ''If a ruler can't be popular with all that, who can?''

Indeed, the Sultan's biggest challenge may be economic rather than political. For years, he has promised to wean Brunei from its reliance on oil by diversifying its economy. Yet the Government's efforts to become a trade and tourism center have come to naught. Given that Brunei has about 23 years of oil reserves left, that problem may fall to the Sultan's son.

For now, Prince Billah may help overcome some of Brunei's current ills. Unlike his playboy uncle, Prince Jefri, or even his father at a younger age, Prince Billah projects a less frivolous image. Educated at Oxford, Prince Billah is said to be a sober young man. His idea of indulgence, according to royal propaganda, is a game of snooker and the tame saxophone music of Kenny G.

March 07, 2006

Sultan's brother told to repay billions

Court orders brother of Brunei's ruler to sell property and jewellery after costly family dispute.

By Andrew Pierce

The brother of the Sultan of Brunei, one of the world’s richest men, has been ordered by a court to hand over properties and jewels worth billions of pounds in the most expensive family feud in legal history.

London-based Prince Jefri Bolkiah will try to challenge the latest ruling in the five-year battle with Sultan Hassanal Bolkiah, 59, over claims that he embezzled £8 billion in the 13 years that he was Finance Minister of the oil-rich state.

But the Prince, 51, will find it difficult to convince any court in Brunei of his right to appeal. His brother, who has ruled as an absolute monarch since 1967, has elevated himself to the same status as the Pope and declared himself infallible.

The Sultan has rewritten the country’s constitution, a copy of which has been passed to The Times, which now declares: “His Majesty the Sultan . . . can do no wrong in either his personal or any official capacity.”

The rewritten Constitution also warns off anyone from taking the Sultan’s name in vain in court anywhere in the world. “No person shall publish or reproduce in Brunei or elsewhere any part of proceedings . . . that may have the effect of lowering or adversely affecting directly or indirectly the position, dignity, standing, honour, eminence or sovereignty of His Majesty the Sultan.”

Prince Jefri, who has not spoken to his elder brother for two years, has been ordered by the Brunei court to sell his imposing mansion, St John’s Lodge in Regent’s Park; the five-star New York Palace Hotel in Manhattan; and the Bel-Air Hotel in Los Angeles, whose guests have included the Prince of Wales. A property at Place Vendôme in Paris, close to the Champs Elysées, a mansion in Singapore and an undisclosed quantity of cash and jewels are also being demanded by the courts.

The Sultan is now also pursuing property assets in Malaysia, Indonesia, Singapore, the Philippines, Japan, France, Britain and the US. Paintings, jewellery and cash held in bank accounts around the world are also on his wish list.

The Sultan has alleged that his brother has failed to repay £3 billion that was agreed in an out-of-court settlement in 2000. The Sultan has since alleged in courts in London and Brunei that unless Prince Jefri had “won the lottery or had some good evenings in the casino” his continued extravagant lifestyle, which allegedly costs £275,000 a month to maintain, was being funded by undisclosed assets.

A spokesman for the Brunei Investment Agency said: “It is hoped that Prince Jefri will voluntarily transfer other assets as required by the terms of the settlement without the necessity for further court orders.”

The ruling, by Chief Justice Mohammad Saied, relied upon the Sultan’s statute of personal infallibility which he granted himself in September 2004.

The Brunei court upheld an application by Freshfields, the London-based solicitors acting for the Sultan’s Brunei Investment Agency, for summary judgment against Prince Jefri.

The Sultan controls every aspect of life in Brunei. There is no elected representation of the people; the police and courts are answerable only to the Sultan. He is Prime Minister, Defence Minister, Finance Minister, Supreme Commander of the Armed Forces, Supreme Head of Islam, chief of the Royal Brunei Police, head of the petroleum unit, and head of broadcasting and information services. Despite there appearing to be no identifiable threat to the country or its people, Brunei has been operating under a permanent state of emergency since December 1962.

The dispute has exposed the extraordinarily extravagant lifestyles of the two brothers. The Sultan’s palace has 1,788 rooms and corridors of gilt and marble. He has built mosques with minarets adorned in gold, pillars of Italian marble and welcome signs on their gates decorated with diamonds.

In 1996 Michael Jackson was flown in to perform for the Sultan’s 50th birthday, and the marriage of his eldest daughter the same year was marked with concerts by Stevie Wonder and Whitney Houston.

Prince Jefri, in a four-day auction in 2001, sold 400 Victorian lampposts, two unused Mercedes-Benz fire engines, several hundred Louis XIV gilt chairs, a fleet of forklift trucks, jewellery, the machinery to operate a bowling alley and 16,000 tonnes of Italian marble which were stored in 21 warehouses. He also had a 180ft yacht called Tits, complete with two tenders, Nipple I and Nipple II.

The sultan, the prince and the missing $14bn

By Mark Maremont in London

March 03, 2008

Prince Jefri Bolkiah of Brunei was once one of the wealthiest men in the world.

Now he's worried he may soon be homeless and forced into bankruptcy.

"They want me to give it all back," he says, flanked by giant Dutch landscape paintings and billowing gold drapery in the huge living room of his London villa, where he resides with one of his three wives and two of his 18 children.

"We don't know where we're going to live."

The 53-year-old younger brother of the Sultan of Brunei, Jefri is on the losing end of one of the world's most colourful family feuds. It started a decade ago when the prince was stripped of his government roles and later accused by Brunei authorities of misappropriating $US14.8 billion of the royal treasury's money.

He denies that, but there's no doubt much was expended on his famously sybaritic lifestyle. The jet-setting prince bought mansions around the world, amassed a fleet of 1700 luxury cars and acquired a 60m yacht.

Since then, the sultan has waged a legal siege on three continents to reclaim Jefri's considerable riches. The sultan scored a decisive victory late last year, when Britain's Privy Council - which hears final legal appeals from Brunei, a former British protectorate - ruled that the prince needed to abide by a 2000 agreement to return nearly all his holdings.

Jefri last week effectively lost control of his most valuable remaining asset, the New York Palace Hotel, a 55-storey property formerly known as the Helmsley Palace. The Brunei Government took ownership of the hotel under a New York court order.

"Brothers should get along with each other," said New York judge Helen Freedman, admonished the lawyers for the warring royals at a recent hearing.

In the New York hearing, one of the prince's lawyers, Philip Le Douglas, likened the idea of Jefri working for a living to Russian aristocrats who "froze to death" when they were forced to sweep the streets after the 1917 revolution. The prince, Mr Douglas said, "has had unimaginable wealth all of his life. Now he's going to go and bus tables?"

The sultan's advisers have started legal proceedings to evict Jefri from his London mansion.

The prince still hopes his brother will let him keep enough money to maintain a more modest version of his lifestyle.

The Brunei Government does not seem inclined to go along.

"Prince Jefri signed an agreement and he should stick to it," says Lindsay Marr, a London lawyer for the Brunei Investment Agency, a government-owned fund.

"Why should he be allowed to keep a large amount of money that wasn't his in the first place?"

Jefri has already turned over billions of dollars worth of property, including the Plaza Athenee hotel in Paris, the giant yacht, the car collection, diamonds and more than 100 paintings by Picasso, Renoir, Modigliani and others.

Brunei is a small oil-rich nation of 374,000 people on the northern coast of the island of Borneo, surrounded by part of Malaysia. The sultan, Hassanal Bolkiah, is an absolute monarch who has ruled the Islamic enclave since 1967. Forbes magazine ranks him as the world's wealthiest ruler, with an estimated fortune of $US22billion ($23.6 billion).

The prince - full name Duli Yang Teramat Mulia Paduka Seri Pengiran Digadong Sahibul Mal Pengiran Muda Haji Jefri Bolkiah - is the youngest of the sultan's three brothers. He was finance minister and chairman of the Brunei Investment Agency, which is charged with investing much of the country's wealth.

But much of the BIA's money went to Jefri. According to court documents, he spent $US475million on Rolls-Royce cars, $US78million on Italian sports cars and $US900million at British jeweller Asprey. A firm owned by Jefri paid $US202million for the Helmsley Palace hotel in 1993, using BIA funds.

Jefri seems bewildered by the accusation that he misspent $US14.8billion.

"It's not that easy to hide," he says. "I keep asking the lawyers, 'Where did it go?"'

In 1997, depressed oil prices triggered a financial crisis in Brunei. The sultan's people brought in Arthur Andersen accountants to go through the investment agency's books, leading to Jefri's dismissal.

Jefri doesn't deny spending some of the BIA's money, but claims in court documents that the sultan also received billions of dollars in special transfers from the government agency to his personal bank accounts. The Privy Council, in its ruling last year, put the total at $US8billion.

In May 2000, Jefri agreed to settle the misappropriation charges that Brunei brought against him, avoiding criminal prosecution. In return for the prince's agreement to hand over nearly all of his wealth, the Government pledged to let Jefri keep an official and a private residence in Brunei, and agreed to set up a $US200million trust fund to cover some of his liabilities, but not his living expenses.

Both sides accuse the other of breaching the pact. The Brunei Government says Jefri has refused to return possessions including the London villa, a sumptuous residence in Paris's Place Vendome, a Cayman Islands trust fund with more than $US100million in cash, and the two US hotels. In total, the assets are worth more than $US1.5billion.

Jefri, in exile since 2004, says he should not have to surrender those assets until he is sure the Brunei Government will live up to its bargain. He worries about whether the Government will keep its promise to pay the capital gains tax due from the transfer of the New York Palace hotel. "I will probably have to go bankrupt" if it does not, he says.

Jefri's living expenses are considerable. He is married to three women and divorced from two more. His fifth wife, the former Claire Kelly, is a New Zealander. They have two boys, who live with their mother in the London villa.

Jefri says he worries about paying for his many children, some of whom study abroad.

Court records show his first four wives received a total of $US158million of BIA funds over the years, although the Government may have reclaimed some.

Asked how many mothers there are, the prince starts ticking them off: "There's one in Singapore, one in The Philippines, one in England, one in Las Vegas." He counts seven in all.

Battle royal for riches of the Sultan

They are among the world's wealthiest men. Now the bitter feud of Brunei's brothers reaches its climax.

By Ned Temko, The Observer

July 29, 2007

It is a family feud on the grandest of scales involving planes, palatial mansions, posh hotels, famous paintings, plus the small matter of £20bn. Now some of Britain's grandest legal brains have been called in to sort it out - meaning that the closely guarded details of the falling-out between two of the world's wealthiest men are suddenly becoming public.

In one corner is the Sultan of Brunei, supreme ruler of the tiny, oil-rich state nestled beside Malaysia on the island of Borneo. In the other is Prince Jefri Bolkiah, his youngest and once-favourite brother. Brunei's former Finance Minister, Prince Jefri became known as PJ to friends during his jet-setting heyday in the Nineties. The tabloid stories he inspired spoke of gold-plated toilet brushes, a Boeing 747 customised to carry polo ponies, even a gold-plated toaster in one of his cars.

More important, the prince was founding chairman of the Brunei Investment Agency. Billions of pounds in oil revenues were funnelled by the BIA into domestic development and overseas property investments, famously including London's Dorchester Hotel.

And a sum of some £20bn - it was alleged in one of the more sensational revelations to emerge in the hearings this month before the Law Lords in London - went into the accounts of the now estranged brothers.

Brotherly loved turned sour a decade ago. Prince Jefri was accused of having misappropriated about $15bn in BIA funds. He was fired, his funds frozen. Brunei demanded restitution. The brothers reached an out-of-court settlement in 2000. And there things stood until it began unravelling with a vengeance.

Prince Jefri claims the Sultan gave him verbal assurances that if he signed the restitution settlement he would be allowed 'lifestyle' exemptions, allowing him to keep a small number of foreign properties. The BIA says there was no such deal, and that Prince Jefri has defaulted on his written undertaking to return virtually everything.

This, the London court has revealed, involves riches on a gargantuan scale. According to Prince Jefri's submission to the Law Lords, he has already handed back more than 500 properties in Brunei; over 100 properties outside Brunei, 1,700 cars; five boats, nine aircraft and over 100 paintings by famous artists.

All of which leaves the disputed properties. Prince Jefri is down to his last two homes and last two hotels: St John's Lodge, near Regent's Park in London, 3-5 Place Vendome near the Ritz in Paris, the Palace Hotel on Madison Avenue in Manhattan, and the Bel Air Hotel in Los Angeles.

Both sides have been girding for a final battle after fighting their way to the highest courts in Brunei. There, the Chief Justice ruled against Prince Jefri, rejecting the idea there had been a lifestyle agreement and telling him to comply. There was just one avenue left to the prince: the final appeal before the Privy Council in London.

Nothing in the cast of characters or the surroundings, as the council hearings began, could have prepared an unsuspecting observer for the fireworks to follow. The venue was a courtroom in Downing Street. On the bench were five Law Lords, chaired by Lord Bingham of Cornhill, a former Lord Chief Justice.

But amid the dry legal argument, there emerged a battery of embarrassing and potentially explosive allegations and counter-allegations.

None is likely to prove more incendiary than Prince Jefri's contention that the dispute arose because an agreed carve-up of BIA funds by the two men - involving 'special transfers' into their personal accounts - went sour.

'The matter of special transfers is at the heart of the dispute between the two brothers,' the prince's lawyers said.

'They total more than $40bn. It is His Royal Highness Prince Jefri's case that there was an agreement to divide up much of the monies between them. It is an agreed fact that of the special transfers that the BIA previously alleged were public money, some $8bn went into the private accounts of His Majesty,' the lawyers added.

Far from 'misappropriating' the funds, the lawyers added, Prince Jefri had used them for '...major infrastructure projects, such as power stations and roads in Brunei'. Much of the rest was for 'gifts' - one of them totalling $62m - 'to various ministers [and] deputy ministers'.

Prince Jefri's team also claimed that, given the Sultan's hold on Brunei, a fair ruling there was impossible.

The BIA's counterblast began with an insistence the Sultan's role had nothing to do with the row. He, the lawyers said, was not a party to the case. It was the BIA whose funds were at issue.

There were so many 'inconsistencies' in Prince Jefri's accounts of the 'lifestyle agreement', they said, that the Chief Justice had reached the only obvious conclusion: there had been no such deal.

Describing Prince Jefri as 'the disgraced former Minister of Finance and chairman of the BIA', its lawyers said he was lucky to have got as good a deal as he did. The agency had paid 'roughly £100 million' to settle other parties' claims against him.

The Privy Council has broken up for the summer holiday, with a ruling expected in the autumn.

The BIA was said to be confident of its ground: a deal was a deal; the prince was trying to back out of it. The prince, said friends, was also hopeful. 'He believes he has done much good for Brunei, and feels this is an issue of fairness,' one said.

The stakes could hardly be higher. A BIA statement after last year's victory in the Brunei courts made it clear they are targeting not just his homes and hotels. 'Other assets required to be transferred,' it said, 'include valuable assets in Malaysia, Indonesia, Singapore, the Philippines, Japan, France, the UK and the USA; works of art; jewellery, and cash...'

Is the party over for runaway billionaire Prince Jefri of Brunei?

June 15, 2008

Prince Jefri of Brunei appeared to be the ultimate hedonist - but a High Court ruling has made him a wanted man. Richard Fletcher reports.

In the 1990s he was a byword for excess: Prince Jefri Bolkiah, the wayward younger brother of the Sultan of Brunei, who toured the world buying up trophy assets on behalf of the oil-rich state, from the jeweller Asprey & Garrard to the landmark Dorchester hotel.

With his fleet of private planes, including a Boeing 747 allegedly converted to carry polo ponies, million-pound shopping sprees and a luxurious yacht called Tits (complete with the tastefully named tenders Nipple One and Nipple Two), Prince Jefri was the Playboy Prince.

Yet in person the shy Jefri failed to live up to his billing. When I first met him, in Paris in October 2006, it was impossible to reconcile the impeccably dressed, quiet, restrained man who sat across the table with the profligate prince I had read so much about - the man who for 10 years had been engaged in a bitter battle with his brother, himself at one time the richest man in the world.

The solid silver tissue-box holders and excessive use of gold paint and red fabrics in the opulent Paris apartment, next door to the Ritz hotel, were hardly in the best taste - but the former finance minister of Brunei did not look like the sort of man who would reportedly spend millions of pounds on exotic motor cars.

But spend he did, for several years, until the Asian crisis of the late 1990s brought his high living to an end. Amid the fallout from the financial crash that saw economies crumble across Asia, Prince Jefri found himself accused of misappropriating $8 billion (£4 billion) from Brunei, the tiny Asian state - not much bigger than Norfolk - ruled by his brother.

The resulting row between the prince and the sultan sparked a family feud - and a decade-long legal battle that climaxed this week with a High Court judge in London issuing a warrant for Prince Jefri's arrest after he refused to attend proceedings. In the latest twist to the story, the Playboy Prince is now "on the run".

It was not supposed to end like this. When I first met Prince Jefri in Paris, he was in an upbeat mood. Accompanied by his advisers, he was confident of agreeing a truce with his brother and negotiating a £200 million-plus "lifestyle agreement".

Two months after we met in Paris, he agreed to do his first ever interview, breaking a decade of self-imposed silence. The interview was clearly part of a wider strategy to "force" the sultan to the negotiating table, despite the fact that the two had not spoken for two years.

We met at his London home, St John's Lodge, hidden behind huge gates on the Inner Circle of Regent's Park. It is without doubt one of the grandest houses in London, bought in 1994 for £40 million. Today, even in the midst of a credit crisis, the house is worth at least £100 million. It is also one of the numerous assets that the Brunei Investment Authority is now trying to seize.

Alongside Prince Jefri throughout the interview, and on all but one of the occasions that we met over the subsequent months, was one of his four wives, a stunning Englishwoman (I never caught her name, as we were never introduced). There were also, as usual, close to a dozen advisers, as well as other family members (Prince Jefri has 17 children aged between two and 35).

"I am no angel, for sure, but I have been the fall guy," he said during a bizarre hour-long conversation in which he seemed bemused by the allegations coming his way. The tales of high living were exaggerated, he said. As for the expensive toys, he never had time to use them: he had set foot on the notorious Tits only half a dozen times.

"It is strange when you are reading it [the tabloid coverage]. It is upsetting, particularly for my children," he added, before claiming that much of the spending had been on behalf of his brother.

At the end of our interview, Prince Jefri gave me a tour of the house. It was even more impressive than the Paris apartment, with its dining room that sits 48. Strangely, there were still numerous gold-framed official portraits of his brother in full military regalia on sideboards and tables, along with gifts from heads of state and bowls of sweets. There were also more domestic touches: pushchairs and children's toys were scattered around the house, as well as unpacked boxes of files and papers.

But should the errant Prince Jefri return to the UK, he is likely to find himself living in the rather less impressive surroundings of HMP Pentonville, following his failure to appear at the High Court. The judge adjourned the case after issuing a bench warrant for the prince's arrest, which could be extended to cover the European Union if he does not give himself up voluntarily.

Prince Jefri stands accused of contempt of court after he allegedly failed to disclose several secret bank accounts and allowed money to be taken out of accounts that had been frozen by a previous court order. He could be jailed for up to two years if found guilty.

"Given his apparent stance, if he is arrested it will take an advocate of great skill to persuade me he should have bail," said the judge.

It is hard to imagine the Playboy Prince adjusting to prison life. At 53, he is more pampered than playboy.

The number of hangers-on might have dwindled during the decade-long legal battle with his brother, but Prince Jefri still retains the trappings of the super-rich, with numerous servants and former Gurkhas at his disposal in both London and Paris.

Many of those who continued to surround Prince Jefri after his exposure had lived off the family for almost their entire lifetimes. Deeply loyal, they - like their master - seemed to have little grip on the position that the prince had found himself in.

Others, though, had more mercenary motives. "If you didn't make a million in tips during the good times, you were stupid," said one of those who had accompanied the family during the early 1990s.

I last met Prince Jefri in early 2007 as he passed through London on his way from Paris to the US. We met in one of London's smartest hotels. The prince was yet again surrounded by an entourage of advisers and lawyers. They had just lost the latest round of one of his numerous legal battles; the talk among them was about the next one.

Prince Jefri seemed distracted. "I am tired of lawyers. It is frustrating. It is sad. I have seen too many lawyers," he had told me a few months earlier. As he got up to leave, I asked him whether he hoped to be reconciled with his brother. "Of course," he replied.

This weekend, that seems more unlikely than ever.

Dorchester Group

February 08, 2006

Activities

The Dorchester Group owns and manages a small and exclusive collection of historic grand hotels in gateway cities in Europe and North America. The five-star properties are all members of the Leading Hotels of the World consortium.

The company takes its name from the first hotel to join its line-up, the Dorchester hotel on Park Lane, London.

The group is owned by the Brunei Investment Agency, the investment arm of the Government of Brunei’s Ministry of Finance.

The Dorchester Group was initially set up to manage the agency’s portfolio of luxury hotels but has, over time, assumed formal ownership of the properties.

Timeline

1929: Civil engineering contractor Sir Robert McAlpine & Sons buys Dorchester House in London’s Park Lane from Lord Morely for £500,000. The acquisition is made on behalf of Dorchester House Syndicate, a joint venture between McAlpine and Gordon Hotels, which intends to rebuild the property.

April 1931: The rebuilt Dorchester hotel opens its doors.

March 1937: McAlpine sets up Dorchester Hotel Ltd to buy out Gordon Hotels’ stake in the property.

1976: The Dorchester hotel is bought by a consortium of Middle Eastern businessmen.

1987: The Sultan of Brunei buys the Dorchester hotel and the Beverly Hills hotel, which was built in Los Angeles in 1912.

December 1998: The Dorchester hotel closes for a major revamp and reopens in November 1990.

1991: The Sultan transfers ownership of the Dorchester Hotel to the Brunei Investment Agency.

1995: The Beverly Hills hotel reopens following a $100m refurbishment.

1996: The Dorchester Group (initially known as the Audley Group) is set up as an independent UK-registered company to manage the European and American hotels owned by the Brunei Investment Company

May 1997: The group acquires Hôtel Meurice in Paris, which dates back to 19th century regional postmaster and coach operator Charles-Augustin Meurice. Meurice established coach inns in Calais in 1771 and Paris (the first Hotel Meurice) in 1817 to cater for British travellers. HôtelMeurice moved to its current location in 1835.

July 2000: Hôtel Meurice reopens after an extensive two-year restoration programme.

February 2001: The Dorchester Group takes over the management of the Hôtel Plaza Athénée, which was built in Paris in 1911. The Brunei Investment Agency bought the property from Brunei’s Prince Jefri who acquired it from Granada in 1997 for £45m. Over time, the Dorchester Group buys the leasehold and, in December 2003, the freehold on the hotel.

February 2002: The Dorchester hotel announces a £10m-plus refurbishment programme, its first in more than 10 years.

June 2003: The group buys the Hotel Principe di Savola in Milan for €275m (£189m) from Starwood Hotels and Resorts. The property, which was part of Starwood’s Ciga chain, dates back to 1927.

Operating data

Total number of hotels: 5

Total number of employees: around 2,200

Number of employees at the Dorchester hotel: just under 500

The Dorchester hotel, Park Lane, Mayfair, London

250 bedrooms (including 55 suites)

General manager: Christopher Cowdray

The Beverly Hills hotel, Sunset Boulevard, Los Angeles, USA

203 bedrooms and suites (including 21 bungalows)

Hôtel Meurice, Rue de Rivoli, Paris, France

160 bedrooms (including 28 suites)

Hôtel Plaza Athénée, Avenue Montaigne, Paris

188 bedrooms and suites

Restaurants are overseen by multiple Michelin-star holder Alain Ducasse

Hotel Principe di Savoia, Milan, Italy

404 bedrooms

Strategy

“The Dorchester Group’s mission is to own and manage, or manage, a small and impeccable portfolio of the finest “grand” hotels in Europe and the United States, with a commitment to preserving and maintaining the highest possible standards of service and excellence.

Its intention is to bring together, over a period of time, a select number of the world’s premier hotels, cultivating their reputations for individual character, friendly and caring staff, beautiful and comfortable accommodation with the highest quality food and service in superb locations.”

Source: company website, December 2005

Key directors

Global development director: Ricci Obertelli

Group operations director: Francois Delahaye (also general manager of the Hôtel Plaza Athénée)

Contact

3 Tilney Street

London

W1Y 5LE

Tel: 020 7629 4848

Fax: 020 7629 0202

E-mail: info@dorchestergrouphotels.com

Website: http://www.dorchestergrouphotels.com

The Sultan of Brunei

New Internationalist (2000)

Despite his wealth, Hassanal Bolkiah Muizzaddin Waddaulah, Sultan and Prime Minister of Brunei since 1967, is surrounded by gloom. From his father he inherited a personal fortune estimated at $40 billion, which once placed him at the top of Fortune magazine’s list of the world’s richest people. Recent reports, however, suggest that his treasure has dwindled to a mere $10 billion — peanuts, these days.

The question is: where in earth can it all have gone? It’s not so easy to blow $30 billion, which is roughly equivalent to the entire annual income of all 125 million people living in Bangladesh.

Well, a sizeable chunk of it went on the Sultan’s palace, a monstrosity that boasts 1,788 rooms and is larger than the Vatican — in a tiny country with just 300,000 inhabitants. When the Sultan’s daughter turned 18 he bought her an Airbus. For himself he prefers his own jumbo jet, originally designed to carry over 400 people.

Great skill in extravagance has also been acquired by his brother, Prince Jefri. Having heard of Disneyland, he decided to build the Jerudong Park Playground in the capital, Bandar Seri Begawan, at a cost of $1 billion.

Between them, the brothers Bolkiah own London’s Dorchester Hotel, the New York Palace and the Plaza Athenée in Paris. After the Sultanate’s independence from Britain in 1984 they bought 2,000 luxury limousines and became the world’s biggest customers for Rolls Royce motor cars.

But their combined spending talents, have proved unequal to the task of disposing of the revenues that constantly flow into their private bank accounts from Shell Oil, which is responsible for extracting the Sultanate’s vast but only natural resource.

So a small army of hangers-on was assembled, among them one Mohamed al Fayed. The Sultan and his brothers have long been suspected of bankrolling Fayed’s subsequent purchase of the upmarket Harrods store in London. Fayed — at the centre of recent bribery scandals in the British Parliament, as well as the father of the boyfriend who died with Princess Diana — claims that during the financial crisis of 1992 the British Government approached him personally to intercede with the Sultan to keep his billions in London.

Such large sums of cash automatically attract political interest. In 1987 it was reported that when US colonel Oliver North asked the Sultanate for help in subverting the Nicaraguan Government — $10 million was duly deposited in a Swiss bank account.

Britain, in keeping with its role as the major arms supplier to the region — Brunei is an enclave in Malaysian territory on the island of Borneo, most of which is Indonesian — concluded an arms deal with the Sultan in 1991 valued at $150 million. Few people can have suspected the presence of British Gurkha (Nepalese) troops in Brunei until they emerged to join the peace-making forces in East Timor.

Even this, however, would have made only a small dent in the Sultan’s wealth had it not been for straightforward financial incompetence, a prolonged fall in the price of oil, and the Asian crash of 1997. Large sums of money were lost on property deals and attempts to prop up the currencies of neighbouring countries.

So the Sultan has had to slaughter some of his polo ponies and sell off other prized trophies, such as Embankment Place in London, valued at $376 million and home to accountants Pricewaterhouse-Coopers. Last autumn, 200 British accountants from Arthur Anderson went through the books in search of what was left, as billions disappeared from the Sultan’s portfolios with bankers Morgan Grenfell, JP Morgan, Citibank and Nomura. The annual $1 billion spent on running Brunei’s ‘Shellfare State’ is now thought to be at risk, along with the polo ponies.

Though the people of Brunei are far from poverty-stricken, they have not been allowed to vote since a failed uprising in 1962. Six political prisoners incarcerated then were finally released in 1991.

Brunei is another of the stains the oil business makes wherever it goes — in the Arabian Gulf, Nigeria, Venezuela, Colombia, Ecuador, Burma, the Caspian Sea and, arguably, Britain as well. The grotesque extravagance and greed it engenders, and the political methods used to control its production, invariably provoke widespread chaos. In this ugly pantomime the Sultan and his brother have taken prominent roles as the world’s most spendthrift individuals.

April 27, 2008

Spoilt, moi? Prince Azim is above the plain old superrich

Who is this pint-sized, diamond-covered Furby? Our correspondent talks to the latest fixture on the celebrity circuit

By Camilla Long

So what exactly does a billionheir do all day? “Wake up, then . . .” Prince Azim of Brunei, 25, fiddles with an enormous turqoise cocktail ring (real, but he’s not sure exactly what stone it is). “Sometimes, I stay in bed all day and watch DVDs. Sometimes I write songs – lyrics. My friend has a studio, so I’ll go to see him and put songs down, with him at the keyboard. That’s my creative process,” he sighs, “but I don’t think I’ll ever release anything.”

A pint-sized, diamond-covered Furby with a shock of black hair and dancing features, Prince Azim probably need not worry about his recording career any time soon. As the second son of the Sultan of Brunei, he is set to inherit a slice of his father’s whopping £25 billion oil fortune, so life will never be any more taxing than the odd dinner at Nobu and nights at “Mahiki!” he squeals in his high-pitched, MTV voice. “I think I’m addicted. It’s all the cheesy music they play.”

Along with the Rausings, the Mittals and the Abramoviches, Prince Azim occupies a level above the plain old superrich. For him, life is a boggling whirl of superyachts, private 747s, massive rocks and security – a world far beyond anything the Beckhams could dream of. “My dad once gave me a solid-gold and diamond GameBoy,” he says. “I was like, this is too heavy, I want a normal one.” His three bodyguards are a constant shadow on the party circuit. “You just accept things,” he shrugs.

And yet, he insists, he’s no materialist – his most treasured possessions are “my pictures”, he says solemnly. He picks up a photograph, one of countless celebrity snaps that line the dining room of his mother’s vast house – sorry, terrace of houses – in Kensington. “Leonardo [DiCaprio]. I met him at the Baftas a couple of years ago. We talked about some green charity. Orlando Bloom,” he points to another, “I met at the premiere of Kingdom of Heaven. And Johnny Depp was at the Dorchester.” (Azim’s father owns the hotel, along with the Plaza Athénée in Paris, the Beverly Hills Hotel in LA and, oh, yes, 531 Mercs.) “He was very nice. I [also] met him at Cipriani,” he says. Here’s another, in a black suit, on a polo field, with a bemused Prince Charles and sons William and Harry. “The princes – very, very nice,” he says. “They were playing polo somewhere and someone introduced us.” In the entrance hall, there is, rather spookily, a picture of Azim with Heath Ledger. “He was really, really nice.”

The prince is not afraid of showing his love of celebrities, either. He once sent a private jet to deliver a £3m diamond necklace and ring to Mariah Carey – “Some things are exaggerated,” he tweets. He hired his idol, Diana Ross, to sing at a party in 2004, and flew in Michael Jackson to another last year. Almost anyone, it seems, will do. He had a notorious escapade with Jade Goody. He was snapped leaving a club with the Big Brother foul-mouth, who was wearing, the tabloids claimed, a £30,000 ring he had given her. “She was a very nice person,” he says. “A wonderful person. I don’t judge people by what I read. I asked her if she needed a ride home, and she was with her boyfriend Jack, so we sent them home.”

Aside from the celebrity-chasing – “Madonna, if you’re reading, I want a picture!” – Azim fills his time with charity work, such as Fashion for Relief, organised by Naomi Campbell, which raised money for the Rotary Flood Disaster Appeal and which he supported by – what else? – appearing in a catwalk show. “[My first thought was] I’m too short,” he squeals. “Need I wear heels?” He found it “scary. You’ve got Claudia Schiffer and Kate Moss in the front row. I mean, I’ve met some of them before, but I don’t really hang out with them”. Afterwards, he says: “Kate was nice. She said, ‘Good work.’ I said, ‘Thank you very much. Can I have a picture?’ ” Fashion is another passion for the prince. In Versace jeans, a yellow T-shirt and a black waistcoat he designed himself – “only for myself, not a range” – his own taste is distinctive. “I like designers who are different: Galliano, Versace,” he says. “I don’t like following the trend. I do go shopping, but not all the time.”

In fact, the reason for our extraordinary invitation to Azim’s mansion is none other than a weekend bag he has designed for charity for the luggage giant MCM, which is relaunching in the UK next month. “It’s called the Prince Collection,” he coos.

Azim spends half the year in Brunei, in northwest Borneo. “It’s a place to relax,” he says. Educated in Singapore and at Oxford Brookes, Azim is part of a colourful family. His uncle, Prince Jefri, achieved fame in the 1980s for his flashy lifestyle, including a 180ft yacht called Tits, complete with tenders Nipple 1 and 2. He was sued for embezzlement by Azim’s father, but the brothers are now reconciled.

Azim himself has three full siblings and eight half-brothers and sisters through his father’s other two wives. “My father treats us all the same,” says Azim. “He’s a very intelligent and reserved man.” His mother, a former air stewardess, split up with his father six years ago – but not before adopting (keep up) 10 further children from all over the world. Azim cites his parents’ break-up as one of the worst times of his life. “You never want that to happen to anybody, but we made her laugh,” he says. “Why does anybody split up? Irreconcilable differences.”

As for his own romantic life, “I’m one of those unlucky-in-love people,” says Azim, who lays claim to two past girlfriends. Love at first sight “happened to me”, he confirms, “but she got married. I don’t think you should force it – everybody finds their someone”. Instead, he surrounds himself with a loyal core of protectors/friends/social secretaries such as Nash, a pretty little munchkin in a Juicy Couture tracksuit who escorts the Style crew to the Prince’s gold-encrusted home, where yet more hangers-on loll around, along with bodyguards and ancient Bruneian staff, who trot out a stream of cakes, chocolates and hot drinks. “My sisters Azima and Fadzilla – Godzilla with an F, ha, ha, ha! – are based over here, so I see them a lot,” he says. “Being alone is my biggest fear.” Unsurprisingly, he is wary of new people and being taken advantage of. “It comes with the territory,” he says. “I know a lot of people see me as a party person.”

Back home, he’s kept on a tighter leash – official engagements and no holidays, because “it’s a whole big deal with the High Commission, so sometimes you just don’t want the headache”, says the prince who, apart from travelling to the UK, has only ever been abroad twice. Poor Azim! For all his cartoonish behaviour, he is a rather lovable character, a sensitive soul who cries at films such as In Her Shoes, and who, in spite of the absurd things he does with it, seemingly appreciates his wealth.

“Yes, I’m spoilt! But I’m grateful to have what I have, and I like to share it,” he says. “My mother was good in making us realise that material things aren’t everything. If I had nothing tomorrow, I’d be able to live my life and still be happy and enjoy it, because I don’t need all this gold. I just need e-mail and Twinkie rolls.” But he wouldn’t quite be the same without it.

October 01, 1999

Brunei Playboy Prince's £400m sell-off

By Godfrey Barker, The London Evening Standard

Prince Jefri, the playboy brother of the world's richest man, the Sultan of Brunei, is to hold a £400 million distress sale of his art

collection.

It will be the biggest ever single-owner sale of art and will go under the hammer in four auctions starting in November. Prince Jefri paid a world record price for any painting - £50million for the last in Renoir's series Jeunes Filles au Piano - in the mid-Eighties and his extravagance is legendary among dealers.

The Prince has now been forced to part with his Impressionist and Modern Paintings, bought over two decades. Sotheby's will dispose of the first tranche in New York in an auction estimated to bring in around £62 million.

Other auctions will follow next year, with some sales in London. The final total is expected to be between £370 million and £430 million, which will be credited towards the debts of over £10 billion of Prince Jefri's construction and investment company, Amedeo, which collapsed last year.

Other art sales will take place, said Bond Street art dealers today, because certain pictures offend the rising Islamic fundamentalism in Brunei. The sheer value of the art admitted from Brunei to Sotheby's HQ in New York has created major security problems. The distress sale, yet to be announced by Sotheby's, follows the Sultan's handover of Amedeo in September 1998 to executive managers from accountants Arthur Andersen & Co.

Prince Jefri's was relieved of his post as finance minister of Brunei in February 1998 and then of his chairmanship of the Brunei Investment Agency (BIA). In July 1998 the Sultan barred trading by Amedeo when the world's biggest corporate debt came to light. In September the Sultan ordered an investigation of the BIA by accountants KPMG after the Brunei government alleged that "large sums of money" had been misappropriated to companies controlled by Prince Jefri. The Sultan then asked the Bank of England to help track down an alleged £28 billion of state and family funds said to be "missing".

Last autumn Prince Jefri tried and failed in the Law Courts to halt the KPMG inquiry. Since then he has been sued for £4million by Aston Martin for cash allegedly owing on 25 Lagondas and for £13 million by Bijan Packzad, parfumiers of Beverly Hills, for alleged breach of contract in developing a line of Prince Jefri: profit will go towards covering loss of his company Amedeo fragrances. Yachts belonging to Amedeo have been seized - the fleet includes Bolkiah I and the £22 million Tits, with tenders Nipple I and Nipple II - and his cars and houses in Brunei have been taken. He settled on unknown terms a breach of contract action for £80million by his art dealers, Bob and Rafi Manoukian, in the High Court in London.

In addition to picking up properties worth up to £26million in Mayfair, Chelsea and Hampstead, the prince bought houses and hotels in New York, Beverly Hills and Paris. He bid £2.3 million at auction for the Duchess of Windsor's jewels and acquired, via Amedeo, 17 aircraft including a Boeing 747 and a fleet of over 2,000 cars. The fate of all this is unknown.

The Manoukians, who have sold Prince Jefri much of the art now coming to auction, claimed he had paid them £550million over 14 years for paintings, objects of art and property. In the witness box at the High Court they said the prince allegedly threw parties for 40 prostitutes at a time in the Dorchester Hotel.

Bob and Rafi Manoukian also revealed they had taken about £50 million from Jefri for Renoir's fifth and last oil in the series Jeunes Filles au Piano. That sum set a world record price for a painting although the world thought, at the time, that the record was the £24.2 million paid for Van Gogh's Sunflowers at Christie's in March 1987.

In sterling, though not in dollars, Prince Jefri's £50 million is still the highest price paid for a painting.

Jefri has since given £12 million for the single pastel which Renoir made of the Jeunes Filles au Piano, in addition to the five oils. He has also paid the world record price for a Modigliani. In 1985, the Manoukians informed the High Court, the Sultan paid £7 million for the 1917 Reclining Nude on Pillow. The nude, however, proved too much for the Sultan to live with and the Manoukians returned their money in 1986. The picture was eventually offered to Prince Jefri at £16 million.

If the work appears at Sotheby's, the prince will be fortunate to get his money back. The contents of the Brunei art collection are one of the world's best-kept secrets. The best pictures hang in the private apartments of the Sultan and princes in the Royal Palace.

What is on view in the public rooms is of much more variable quality. So far Prince Jefri's collection of jewels has not been earmarked for sale. It includes the 165-carat sapphire carved by Asprey in 1998 to imitate the fictitious "blue diamond" in the film "Titanic".

Asprey & Garrard, owned by the Brunei company Amedeo Crown, has been a special financial headache for the prince. He closed the British Crown Jewellers, Garrard, in June 1998 and merged them with Asprey in Bond Street. Prince Jefri's friends maintain his woes are caused by the collapse of world oil prices.

L'Hôtellerie n° 2705 Hebdo 15 Février 2001

Le Plaza Athénée change de main

Le palace de l'avenue Montaigne passe sous le contrôle de la Brunei Investment Agency, et est désormais managé par le groupe Dorchester.

La rumeur courait depuis plusieurs mois. C'est aujourd'hui chose faite. Le palace de l'avenue Montaigne, le Plaza Athénée, vient une nouvelle fois de changer de main. Le prince Jefri Bolkiah, priopriétaire de cet établissement haut de gamme comprenant 187 chambres dont 41 suites (ainsi que du Palace à New York et du Bel Air à Los Angeles), a en effet trouvé un compromis au litige qui l'opposait à son frère, le sultan de Brunei. Aux termes de cet accord, le fonds de commerce de l'hôtel parisien (les murs appartiennent à l'assureur Axa) a tout simplement été transféré à The Brunei Investment Agency (BIA), société gouvernementale chargée des investissements du Brunei.

Un changement dont François Delahaye, directeur du Plaza, à qui l'on a garanti le maintien des équipes en place, se dit "ravi". D'autant plus que l'établissement sera dorénavant managé par le groupe britannique Dorchester. "Un nouvel avenir s'ouvre devant nous !", estime d'ailleurs François Delahaye. Et d'ajouter : "Nous allons en effet pouvoir profiter de l'expérience du Dorchester Group, particulièrement efficient sur le créneau du 5 étoiles." Fondé en 1996 de l'autre côté de la Manche, le groupe Dorchester possède et exploite de fait trois établissements de luxe, dont le Meurice à Paris, Le Beverly Hills en Californie et enfin le Dorchester à Londres.

Des adresses de réputation internationale qui offrent des prestations de très haute volée et qui ont bénéficié de gros investissements comme le Meurice, rénové tout récemment du sol au plafond.

S'il est encore trop tôt pour l'affirmer, le Plaza Athénée, pour lequel quelque 300 millions de francs ont d'ores et déjà été déboursés au cours des dernières années, devrait donc a priori pouvoir encore compter sur le groupe Dorchester afin de peaufiner sa cure de jouvence. "Nous allons d'abord procéder à une évaluation de l'hôtel et nous réaliserons ce qui est nécessaire en fonction de cet état des lieux", précise du reste le groupe.

Deux palaces à forte personnalité

En attendant, le palace de l'avenue Montaigne va dès à présent pouvoir tirer avantage de la force commerciale de la compagnie ainsi que de ses programmes marketing. Un atout non négligeable sachant que l'hôtel a cependant réalisé une excellente année 2000. "Malgré trois mois de travaux, le Plaza est effectivement parvenu à afficher un taux d'occupation de 73 %, et un prix moyen chambre supérieur à 4 000 francs", souligne François Delahaye.

Une seule ombre au tableau, le Plaza Athénée dispose maintenant d'un 'frère' dans la Ville lumière, à savoir le Meurice. Une double présence qui pourrait prêter à confusion au niveau commercial. Ces établissements ne vont-ils pas en effet se faire concurrence ? Les représentants du groupe Dorchester affirment dans un communiqué que "la présence de deux palaces sur un marché aussi fort que Paris ne pose pas de véritable problème". Et d'ajouter : "Les deux établissements en question ont en outre des personnalités très spécifiques, des situations géographiques distinctes et des clients différents. Le Meurice est très présent sur les marchés américains et japonais, tandis que le Plaza, lui, est davantage marqué par la clientèle sud-américaine", argumentent-ils.

Des explications qui n'empêchent pas de nouveaux bruits de circuler sur la place parisienne : "Le Plaza Athénée serait en effet à nouveau sur le marché", selon différentes sources. D'autres affirment que cette opération se limiterait à évaluer l'hôtel.

Sultan of Brunei's ex-wife and the £2m con

By Richard Edwards

July 12, 2007

She was a former air hostess who married the world's richest man.

But when the Sultan of Brunei divorced Mariam Aziz after two decades together - replacing her with a glamorous television reporter 32 years his junior - she was left wondering where life would take her.

Unfortunately, she looked for the answers from a fortune teller she met in a London casino.

Three-and-a-half years later, after the most "bizarre" series of court cases, Mrs Aziz and five of the country's most senior judges are still scratching their heads at what happened next.

"Mrs Zino", a frail Iraqi lady in her late sixties, read her palms, became her "trusted friend" and then tricked her out of £2 million.

The fortune teller threatened to reveal "embarrassing" details about Mrs Aziz's marriage to the 60-year-old Sultan when she was sued. After a case full of theatrics, she was jailed for five months.

But there was one final card to be played. The Sultan of Brunei stepped in, claiming that as a head of state he deserved his "dignity" to be preserved. He said that as an "act of respect" the story should be suppressed.

In yesterday's final act, three judges at the Court of Appeal ruled that to ban publicity would be against the principle of free speech. They lifted anonymity orders won by the Sultan - allowing the story to be told.

Mrs Aziz, who is half Bruneian, a quarter Japanese and a quarter English, divorced the Sultan in 2003.

She was stripped of all her royal titles and despite "immense personal wealth" she was not happy.

Court papers revealed she found the split "very upsetting" and said she struggled to adjust to life as an independent woman.

In an earlier judgment, Mr Justice Underhill said: "She struck me as not particularly confident nor particularly sophisticated."

He added: "A picture emerged. . . of a woman who was generous and trusting but rather lonely and eager for friendship."

During a trip to her London home in December 2003, she found herself in the Rendevous casino on Park Lane. There she met ''Mrs Zino'' - whom she came to know by her real name, Aziza Amir - and they quickly became close. She confided in Mrs Amir the circumstances surrounding her divorce and her innermost secrets.

The next month, the fortune teller "introduced" her by telephone to an eligible young man called "Mr Aziz". They developed a relationship - but only over the phone. The stranger declared his love to her, and said he needed money for his businesses and to buy a house.

Over the following months, Mrs Aziz made seven bank transfers totalling £1,254,000.

She sent cash payments of around £760,000 to the young man and showered him with gifts - including two diamond bangles, seven Louis Vuitton shirts and jumpers and a Cartier diamond watch. Ten months later, however, when she still had not met him, she became suspicious. It was then she made the most "remarkable" discovery.

There was no Mr Aziz; he had never existed. It was in fact Mrs Amir putting on a man's voice at the other end of the telephone.

Mrs Amir had even employed a mini-cab driver to act as a go-between - delivering dinners and roses to her and picking up the large cash payments in shoe boxes. She kept them under her bed in north London and spent the cash on massive gambling sprees at casinos.

When she realised she had been caught, the fortune-teller went on the offensive, threatening to release "embarrassing" details of Mrs Aziz's life with the Sultan. A letter from Mrs Amir dated Jan 10, 2005 said that the unspecified "information" was so serious it would "cause more damage than an earthquake".

A letter in April, 2005, set out seven alleged facts about Mrs Aziz's relationship with her husband - all "of a confidential nature".

In the ensuing High Court case - held in private because of the Sultan's protest - Mr Justice Underhill said Mrs Amir "sometimes wholly lost control of herself". She was jailed for five months for contempt of court and ordered to return the money to Mrs Aziz.

Mr Justice Underhill said: "Fortune tellers are likely to be good practical psychologists and to have a good understanding of human suggestibility, not to say gullibility.

"Mrs Amir is, in my judgment an extremely shrewd and manipulative woman. Her gambling habit gave her a pressing need for money. She is bold and not afraid to take her chances."

Lord Justice Lawrence Collins, who made yesterday's ruling, described the saga as an "extraordinary case".

Sultan of Brunei's bid to 'protect dignity' fails

By staff and agencies

July 12, 2007

The Sultan of Brunei failed today to block publicity over the "extraordinary case" of his ex-wife who gave £2 million to a man who may never have existed.

He claimed that as a head of state he was protected by international and British law which require the UK to "treat him with due respect and ... take all appropriate steps to prevent any attack on his ... dignity".

But three judges at the Court of Appeal ruled today that nothing embarrassing about the Sultan's private life had been disclosed in the legal action by his former wife, Mariam Aziz.

Just to mention his name was not an "attack" and to ban publicity for this reason would be "a wholly impermissible invasion of the principle of free speech", the appeal court ruled.

Lord Justice Lawrence Collins opened his ruling today with the words: "This is an extraordinary case."

He explained that Mariam Aziz met the main defendant, Mrs Aviva Amir, a fortune teller, at a casino in 2003.

The former air hostess, who was divorced from the Sultan earlier in 2003 after 20 years of marriage, came to regard Mrs Amir as a trusted friend and confidant, said the judge.

Mrs Amir then introduced the claimant to a man she called Mr Aziz over the telephone.

"The claimant and Mr Aziz never met, but over the following months they developed what appeared to be a close relationship conducted by telephone and text message, and involving exchanges of gifts."

Between May and November 2004, the claimant made bank transfers totalling over £1 million intended for Mr Aziz, as well as payments of more than £1 million in cash via Mrs Amir's driver, said the judge.

Although Mr Aziz, who has never been traced, was originally named as first defendant, the claimant maintains that he never really existed and it was in fact Mrs Amir, using an assumed voice on the telephone.

Mariam Aziz won her case, heard in private, against Mrs Amir last year when Mr Justice Underhill ordered Mrs Amir to return the money and awarded damages in relation to the gifts.

Mrs Amir was also ordered not to disclose any information on audio tapes recorded for her by Mariam Aziz and in a letter said to contain confidential information about her relationship with the Sultan during and after her marriage.

Lord Justice Lawrence Collins said that the Sultan, relying on his status as a foreign head of state, sought orders preventing publication of anything that could lead to his identification when his former wife sought to have Mrs Amir jailed for failing to comply with the court orders.

Committal proceedings are invariably held in public in the UK courts.

Mr Justice Gray in 2005 refused the application for anonymity but continued the privacy order until the case had been heard by the Court of Appeal.

The High Court judge's ruling was upheld today by the appeal judges who said all the previous judgments in the case - which contain none of the confidential information - are now public.

Mrs Amir was found guilty of contempt and given a suspended sentence of three months.

Mr Justice Gray said Mrs Amir had attempted to influence the claimant to withdraw her action against her by threatening to disclose the confidential information.

Lord Justice Lawrence Collins, who heard the appeal in private, said he was "far from convinced" that international law required states to take steps to prevent individuals from insulting foreign heads of state abroad.

But he said it was not necessary to identify such a rule because there had been no attack on the dignity of the Sultan and all steps had been taken to prevent such an attack.

Sultan of Brunei marries his second, second wife

By Sebastien Berger, South-East Asia Correspondent

August 23, 2005

The Sultan of Brunei, once the world's richest man, has taken a former newsreader 32 years his junior as his second wife, reports said yesterday.

Family members and close friends were the only people to attend the wedding of Sultan Hassanal Bolkiah, 58, and his 26-year-old bride, Azrinaz Mazhar Hakim, in the Malaysian capital Kuala Lumpur, the New Straits Times said.

Azrinaz was educated in Malaysia and worked as a television reporter and newsreader until leaving her station three months ago, saying she wanted to "venture into other undertakings".

Bruneian men are allowed four wives, as Islam decrees, and the sultan divorced his first second wife Mariam Abdul Aziz, a former air hostess, two years ago, stripping her of all her royal titles.

He has remained married to his first wife, Anak Saleha, throughout.

Brunei is an absolute monarchy, with a comprehensive welfare system for its people, including virtually free housing, courtesy of its oil billions.

But the House of Bolkiah is not as rich as it once was and the private wedding ceremony had but a shadow of the opulence of previous family celebrations.

In 1996, Michael Jackson was flown in to perform for the people of Brunei for the sultan's 50th birthday, and the marriage of his eldest daughter the same year was marked with concerts by Stevie Wonder and Whitney Houston.

But the Asian financial crisis of 1997-8, followed by years of low oil prices, brought the sultan's global wealth ranking down tens of places.

His brother, Prince Jefri, lost billions more, squandering the money on a string of acquisitions around the world including a super-yacht called Tits, complete with two tenders, Nipple I and Nipple II.

Thousands of guests were invited to the wedding of Brunei's crown prince, Haji Al-Muhtadee Billah, to a 17-year-old schoolgirl last year, when the sprawling palace was draped in flashing, pastel fairy lights.

But by the opulent standards of the sultanate the occasion was relatively modest, with the fireworks sponsored by an oil company.

Lord Justice Sedley said: "Irrespective of his status as a head of state, the Sultan has been amply protected by both judges below from any unnecessary embarrassment in the course of this bizarre litigation."

Brunei princess weds in lavish style

By Our Foreign Staff

June 12, 2007

Diamonds sparkled and cannons boomed yesterday as a daughter of the Sultan of Brunei, one of the world's richest men, married a civil servant in a lavish traditional ceremony.

Brunei’s newly-married royal couple sit on thrones during the traditional marriage ceremony in the ornate Nurul Iman palace

Climaxing two weeks of celebrations, thousands braved a blistering midday sun to greet the daughter of Sultan Hassanal Bolkiah and her smiling husband as they cruised through town in a gold Rolls-Royce after the ceremony at the 1,700-room palace.

More than 2,000 guests witnessed the wedding of Princess Majeedah Nuurul Bulqiah, 31, and Pengiran Khairul Khalil, 32, beneath 12 crystal chandeliers in the throne room.

The princess, wearing a tiara and holding a small bouquet of diamond-studded flowers, sat beneath a gold-leaf canopy at the head of the hall.

Mr Khairul, escorted by Sultan Hassanal, crossed a yellow carpet and passed between four tall yellow candles to approach his bride. He placed his hands briefly on her forehead before the muffled boom of cannons sounded 17 times outside.

The princess, who holds a master's degree in environmental development from King's College London, is the fourth child of the Sultan, one of the world's longest reigning monarchs.

Mr Khairul, who works in the prime minister's office and also studied in Britain, received a royal title and is now known as "Yang Amat Mulia Pengiran Anak Khairul Khalil", or "very noble".The sultanate, which dates back to the 15th century, is an absolute monarchy which gained its full independence from Britain in 1984.

Occupying a sliver of Borneo island, it is the world's fourth-largest producer of liquefied natural gas.

The mineral wealth has brought Brunei's citizens, who number fewer than 400,000, one of the highest per capita incomes in Asia.

I am no angel, but I have been the fall guy

By Richard Fletcher

December 02, 2006

He was once the world's most notorious playboy. Prince Jefri, wayward brother of the Sultan of Brunei, would book entire floors of the best hotels for his entourage when they jetted in on spending sprees which saw millions spent on everything from fast cars to horses.

But after a decade of self-imposed silence Prince Jefri has hit back, claiming that he has become the family's "fall guy".

Other members of the ruling family were responsible for much of the excess that has led to his infamy, he claimed, in an interview at his home in London.

"I am no angel for sure, but I have been the fall guy," he said, speaking publicly for the first time as the dispute heads back to the British courts.

The youngest brother of the Sultan of Brunei – one of the richest men in the world – Prince Jefri became a byword for excess in the 1990s amid reports of almost unbelievable spending and high-living. The brothers became tabloid fodder after a family dispute reached the British courts, which resulted in restrictions being imposed on his spending power.

Yesterday Prince Jefri was given leave to appeal to the Privy Council in an attempt to win a more generous settlement from his family. He will now try to persuade the council to overturn a ruling in the Brunei courts which could see his assets in the UK and around the world seized.

The appeal will be heard in public, which could prove deeply embarrassing for the Sultan of Brunei with new revelations and allegations. It could also throw light on the ownership of a mystery Citigroup bank account – the 555 account – into which billions of dollars is said to have been deposited.

Brunei – a tiny Asian state the size of Norfolk – had billions of "oil-dollars" to spend in the 1990s. As finance minister and head of the Brunei Investment Authority (BIA), Prince Jefri toured the world investing in property and snapping up hotels and trophy assets including retailer Asprey & Gerrard and the Dorchester Hotel in London.

But he was later accused by his brother of misappropriating more than $15 billion as he went on his global spending spree.

During a bitter legal battle with his brother, tales of private yachts and fleets of private aircraft (including one Boeing 747 airliner allegedly converted to carry polo ponies) emerged alongside claims of high living. But Prince Jefri claims that many of the tales are exaggerated.

"It is strange when you are reading it. It is upsetting particularly for my children," he claimed.

He only used the infamous luxury yacht Tits (complete with the tastefully named tenders: nipple one and two) four or five times. "The whole family used it. I did not have time," he said. As for the pornographic watches that, reportedly, showed a couple copulating on the hour, these days his choice of watch appears to be much more restrained.

In person it is hard to reconcile Prince Jefri with his playboy image. He is impeccably dressed and incredibly fit for a man who celebrated his 52 birthday two weeks ago (his 17 children – aged between 1-33 – gathered in Paris to mark the occasion). But he is also short, quiet and restrained. He could, even, be described as shy.

The latest legal battle dates from an out-of-court settlement agreed in 2000, under which the BIA agreed to drop its pursuit of Prince Jefri if he returned assets to Brunei. But the peace quickly broke down. Prince Jefri's office in Brunei was raided – "they took all my things, they took my documents and personal belongings including jewellery" – as both sides accused each other of breaching the agreement.

Prince Jefri claims that the 2000 settlement included a "lifestyle agreement" that allowed him to hold on to a number of US hotels and homes in London and Paris as well as a trust fund to provide for him and his family. He alleges the agreement has since been breached, however the BIA claim that Prince Jefri has failed to return assets as agreed in 2000.

Following yesterday's ruling the row now looks set to be played out in the London courts.

Suggestions that he has hidden assets are rejected by Prince Jefri. "You cannot hide a hotel," he said. And he claims that although he may have legally owned assets – like the boats and planes – they were in fact used by other members of the family.

For example, he claims, he bought a number of Old Master paintings for his brother. "I would buy them. He would keep them. He would come to the house and take what he wanted. It was between brothers. He knows what he took," he said. A spokesman for the Sultan of Brunei declined to comment.

He has, until now, kept his own counsel in order to protect his brother. "I did not want to tarnish him. It would have reflected on him," he said.

It may seem a bizarre claim – given that they have been in dispute for almost a decade and have not spoken for over two years – but then Prince Jefri's relationship with his brother is complicated. In both his London and Paris homes there are numerous gold-framed official portraits of his brother in full military regalia on sideboards and tables. The two brothers were obviously close: playing on the same polo team for a number of years. "We were very close. He introduced me to the game," explained Prince Jefri, who lights up at the talk of polo.

But in recent months he has become increasingly concerned about his brother's rule of Brunei.

In particular recent changes to the Brunei constitution have sparked concern. "I never thought he would go this far. You cannot even say anything bad about him. I would be imprisoned or fined if I said these things in Brunei," said Prince Jefri.

"He can change almost anything he likes by decree. I worry about what will happen when the oil runs out – 90 per cent of the economy is dependent on oil and gas," added Prince Jefri, who argues that after four decades a "state of emergency" should be lifted.

But despite the attack on his brother's legal powers and immunities Prince Jefri still hopes to reach an amicable settlement: "I have tried to resolve this … I am still eager to deal with this."

He added: "I am tired of lawyers. It is frustrating. It is sad. I have seen too many lawyers."

He has not felt able to return to Brunei for a number of years and freely admits that he misses home. "I have lots of friends there. I would like to visit, my family is still there, but it is very difficult now."

Sultan of Brunei in row over £4m gold Koran

By Nick Squires in Sydney

August 18, 2007

He is one of the world’s richest men but the prospect of shelling out £4 million on a gold-lined miniature Koran tested the legendary largesse of even the Sultan of Brunei.

In a sign that the South-east Asian potentate’s extraordinary wealth has its limits, he allegedly backed out of a deal with Australian businessmen to buy the matchbox-size holy book in 2005.

Adding to the exoticism of the saga, the Australians claimed to have bought the tiny treasure from a former colonel in the KGB, who told them the Ottoman Empire relic had been in his family’s possession for more than a century.

The 61-year-old sultan had allegedly agreed to buy it as a wedding present for his third wife, a glamorous television hostess 32 years his junior.

The dispute went to court and yesterday the sultan scored a victory, with an Australian judge ruling that the case was outside the court’s jurisdiction and that the three businessmen should instead pursue it through Brunei’s legal system.

But the prospects of that happening are almost zero because the sultan is immune to prosecution in his tropical fiefdom, a former British protectorate on the north coast of Borneo.

He can do no wrong, either in a regal or personal capacity.

“The fact of us going to Brunei to lodge a lawsuit against the sultan is something that can’t happen, given the fact that he’s declared himself infallible,” said Michael McGurk, one of the businessmen who claimed breach of contract.

“The sultan should be called to account ... he’s managed to get himself a ‘Get Out of Jail Free’ card.”

He said the court’s decision was a travesty of justice.

“No one should be above the law in Australia.”

He added that the dispute cast doubt on the sultan’s reputation as a generous benefactor as he and the other owners had guaranteed that part of the proceeds of the sale would go to Islamic charities in Sydney.

“All of those charities have lost out today as a direct result of this judgment,” said Mr McGurk.

The business syndicate argued that the sultan, a graduate of Sandhurst, had agreed to buy the miniature Koran, with negotiations conducted through his private secretary and godson.

The businessmen said they travelled to Brunei on numerous occasions to try to finalise the deal, spending more than £200,000 on flights, accommodation and legal costs.

But lawyers for the sultan had earlier argued that the case should be dismissed, calling it “a joke”.

His reluctance to part with £4 million may be explained by the wild spending spree he and his now out-of-favour brother, Prince Jefri, embarked on in the 1980s and early 1990s.

Their extravagance guzzled millions of dollars of Brunei’s oil and gas revenue and reduced the sultan from being the world’s richest man to barely making the top 20, according to Forbes magazine.

The Koran, which can fit into the palm of a hand, is encased in a bejewelled box.

It was authenticated last year by the head of the department of Arabic and Islamic Studies at Sydney University, who described it as “a rare copy of the Koran of exceptional characteristics”.

It dates back to the 16th or 17th century and was intended as a sacred object rather than as a text to be read.

The syndicate will consider appealing the court’s decision.

Brunei seeks to join world's wealthiest nations

January 21, 2008

Bandar Seri Begawan (Thomson Financial) - Brunei, which already boasts one of the highest per capita incomes in Asia, wants to vault into the world's top 10, according to a long-range government development plan.

The tiny, oil-rich nation on the weekend unveiled its 'Wawasan Brunei 2035' plan which urged better implementation of development initiatives in order to accelerate economic growth.

The government identified tourism as a potential revenue generator, called for improvements in transport and communications infrastructure, and greater investment in research and development, according to an executive summary of the 'Brunei Darussalam Long-Term Development Plan'.

Brunei is aiming for a 'dynamic and sustainable economy with income per capita within the top 10 in the world,' the summary said.

The government also wants Brunei to have a quality of life that is among the world's top 10, it said.

The nation has been debating how to secure its economic future amid dwindling oil and gas resources.

Brunei is the third-largest oil producer in Southeast Asia after Indonesia and Malaysia, and the world's fourth-largest producer of liquefied natural gas, according to the Brunei Yearbook 2007.

Reserves are expected to last for at least two more decades based on current production rates.

The government's long-range plan said economic progress has been inconsistent. It said a delay in implementing development projects has contributed to lower economic growth, limiting effectiveness of the government's fiscal stimulus strategy.

One of the key challenges to accelerate economic growth rates during the 2007-2012 six-year plan 'is therefore to enhance the national capacity to carry out development initiatives,' the government's report said.

The plan aims to increase by at least 7 percent a year the number of tourists staying in paid accommodation, with an immediate target of 50-60 percent average hotel occupancy this year.

The report also calls for a 50-percent increase in tourism-related employment by 2010.

The transport and communication sector will focus on improving infrastructure, with emphasis on reducing travel time and opening up new access within the country, it said.

Another important feature of the initial six-year plan is research and development (R&D), the report said.

'Investment in R&D is aimed at narrowing the gaps that exist between Brunei Darussalam and its neighboring countries in the field of science, technology and innovation,' it said.

The government will also introduce a new Environment Act to strengthen environmental protection 'and ensure sustainable management of the country's national resources,' the report said.

Brunei's government has allocated 9.5 billion Brunei dollars (7.0 billion US) to implement the initial six years of its long-range plan, the Borneo Bulletin on Sunday quoted Kamis Tamin, permanent secretary in the prime minister's office, as saying.

The country's mineral wealth has brought Brunei's citizens, who number fewer than 400,000, an array of social welfare benefits.

Brunei is a Malay Muslim absolute monarchy ruled by Sultan Hassanal Bolkiah, who last year celebrated 40 years on the throne.

The sultan is prime minister, defense minister, finance minister and head of Islam in the country which occupies a sliver of Borneo island. It gained full independence from Britain in 1984.

July 14, 1988

Brunei Journal; Sultan's Wealth Is Vast; His Power, Greater Still

By Henry Kamm

Multicolored triumphal arches are being erected throughout this capital and across the roads leading to it. Garish signs are going up on grandiose Government buildings, raw, new office towers and shoddy Chinese shops, and chains of Christmas-tree bulbs illuminate them.

The theme of the decor is the number 42, because Paduka Seri Baginda Sultan Haji Hassanal Bolkiah Muizzaddin Waddaulah, the 29th in his line of rulers of Brunei, will celebrate his 42d birthday on Friday.

Four parades in the capital, where about one-quarter of the country's population of 227,000 lives, will be the highlights of 10 days of celebrations. Perhaps, as in most years, some of the prison inmates will be set free. A Dwindling Breed

In the 21st year of his reign and from a newly built palace of 1,800 rooms - a more recent, somewhat smaller palace houses the second of his two wives - Sultan Hassanal Bolkiah is one of the last remaining absolute monarchs, freely spending and investing the riches that accrue from the petroleum and natural gas of his realm on the northwest coast of Borneo island.

Where the public purse ends and the Bolkiah family's private assets begin is one of Brunei's enduring and closely guarded mysteries. But there is no doubt that the ruler and his family are among the most conspicuously rich people in the world, and that by Southeast Asian standards, most people in Brunei live in the comfortable-to-wealthy range.

There are almost half as many cars as people, making for surprising rush-hour traffic jams in one of the world's smallest capitals. Free education and health services, exceptional for Southeast Asia, are the norm here. Unlike the rest of the region, Brunei has a labor shortage, and unemployment is rare.

Brunei's petroleum may run out in a quarter-century, geologists say, but with foreign exchange reserves of $20 billion, its small population can live from the earnings of the Sultan's investments. Plenty of Money, Few Freedoms

Brunei has a per capita income higher than that of the United States. The Borneo Bulletin, a semi-official newspaper, put it this week at ''in excess of $17,500.'' Because of the personal character of the ownership of Brunei's economy, the exact figure is secret.

Brunei has no national debt, trade deficit or income tax. It also has no semblance of democracy, except that at the village level citizens choose their chiefs.

A constitution somewhat limiting the monarch's absolute power, adopted in 1959, has never been put into effect. Local elections in 1962 gave 54 of 55 seats to opponents of the Sultan's father. The winners were not seated, a rebellion erupted with Indonesian aid and was crushed, its leaders were imprisoned or fled and no more elections have been held.

There is no free press, and state-owned television is devoted largely to the Sultan's activities. News from the Communist world or about religions other than Islam is effectively banned. Handel Passes the Censors

Earlier this year, an amateur choral group that wished to perform Handel's ''Messiah'' had to submit the text to the Home Ministry, the top police authority, before receiving permission to sing.

Last March, the Sultan announced the detention of two conservative businessmen who had served as president and secretary general of a small party that had been formed at official instigation but had, surprisingly, adopted critical views.

At a meeting in New Zealand, Abdul Latif Chuchu, the secretary general, had criticized the Sultan's absolutism and called for parliamentary democracy and urged the United Nations Human Rights Commission to hear his complaints.

The Sultan dissolved the party. Its two officials remain imprisoned without trial. Politically interested Bruneians said they did not know how many people are detained for political offenses, nor whether some of those arrested in 1962 were still imprisoned. Diplomats' estimates range from fewer than 10 to about 40. Dissent Generated From Abroad

Much of the criticism that reaches here comes from exiles who enjoy a measure of tolerance in Malaysia and smuggle leaflets into Brunei. The criticism centers on the great wealth and conspicuous use of it by the Sultan and other family members.

''Since I've been here, I have seen unending coming and going of jewelers and others selling the best of luxury goods from every Western country,'' a diplomat said. ''And the amounts they sell are astounding.''

An occasional visitor to the palaces said that every time he visited he was shown newly acquired paintings by old and modern masters, of inestimable value. ''The palace absorbs vast sums of money in interior decoration,'' another diplomat said. ''It's a cross between Ali Baba's cave and an Italian furniture catalogue.''

The Sultan, a polo enthusiast, has created an extensive complex of polo grounds, air-conditioned stables for perhaps 100 of his own ponies and a stud farm. In official publications the ruler's passion for the game, which is not known as a sport for the masses, is ascribed to higher motives.

''Through sport, particularly polo, he has sought to enhance and develop good relations in Southeast Asia and in Europe,'' the current official compendium of ''Facts and Figures'' reports.

March 06, 2001

How to Say No To a Sultan; Brunei and Its Leader Try Economic Discipline

By Wayne Arnold

There is probably no better vantage point on the changes creeping across this oil-drenched sultanate than astride one of the sleek, powerful horses at the Jerudong Park Polo Club.

Not long ago, the club's 200 imported Argentine ponies, immaculate fields and opulent clubhouse were restricted to family and guests of Sultan Hassanal Bolkiah. Now, in what this country has declared Visit Brunei Year, anyone can ride for as little as $20.

The open-stable policy, though, is far more than equestrian outreach. The club was built in a decade of royal extravagance that, coupled with the Asian financial crisis in 1997 and 1998, devastated Brunei's wealth and helped push its economy into a recession from which it has yet to fully recover.

In response, Brunei's multibillionaire monarch has assumed the unlikely role of economic disciplinarian, trying to drag his sleepy, conservative Muslim enclave into the global economy. Selling pony rides is part of a larger effort to refill the coffers, lure tourists and investors, and wean Brunei from a long overdependence on oil and government money.

''We have to be more competitive,'' said Wahab Juned, director general of the Economic Council Secretariat, whose 12 members were appointed by the sultan to draft an economic blueprint. ''We need to create jobs.''

Skepticism over Brunei's efforts abounds. Brunei has been vowing to diversify its economy since the mid-1980's, but reductions in the dominance of oil have been achieved largely by raising government outlays. Surging oil prices have taken some of the urgency out of the reform drive. But while the sultan's planners have honed their free-market vocabulary, few are willing to discuss how economic liberalization might reduce the dominance of a man most will refer to only as ''His Majesty.''

''What Brunei needs now is transparency and accountability in the government,'' said Hatta Zainal Abidin, president of the Solidarity National Party, the country's only legal political opposition group.

The sultan's family has been ruling this part of Borneo for six centuries, gradually ceding territory to what is now Malaysia to the point that modern Brunei's roughly 300,000 people live in an area the size of Delaware. Brunei is so small that it has no central bank, instead pegging its currency to Singapore's. The capital remains a quaint backwater, where most women cover their heads, buildings rise no higher than the central mosque and alcohol is banned.

The discovery of oil here in 1929 clinched Brunei's fortune and has made the sultan, 54, one of the world's wealthiest individuals, with a net worth estimated at $16 billion. His spending is legendary: he has two palaces, one for each wife, the largest a $350 million, 1,788-room building bigger than the Vatican. He paid $53 million in 1985 for London's Dorchester Hotel, then two years later spent an estimated $185 million to buy the Beverly Hills Hotel.

Since the sultan is the absolute ruler, his wealth and the nation's are indistinguishable, even though Brunei is technically a constitutional monarchy. The constitution and legislature have been suspended since an abortive rebellion in 1962. The dearth of elected officials keeps the sultan busy: he is the self-appointed prime minister, finance minister, defense minister, police superintendent and chancellor of the national university.

Autocracy has been good to Bruneians. They pay no income tax. Education and health care are virtually free. And despite its generosity, Brunei's government has no debt.

Brunei is no Kuwait, however. There are no flashy boutiques lining the streets of the capital, Bandar Seri Begawan; Mercedes do not clog the parking lots. On paper, Brunei's average personal income is on a par with Canada's, but it is anyone's guess what the average income is if the royal family is excluded.

The 207,000 barrels of oil Brunei produces every day still account for roughly 40 percent of its economy and almost 90 percent of its exports. Oil is the private sector's biggest customer and the government's chief source of revenue. Yet Brunei Shell Petroleum, the government's joint venture with the Royal Dutch/ Shell Group and the dominant oil producer, hires only about 2,800 Bruneians.

As a result, nearly half the population works for the government, a situation that authorities long ago realized was unsustainable. But it took the country's previous finance minister, the sultan's famously flamboyant playboy brother Prince Jefri, to drive the point home. Prince Jefri was in charge of the super-secret Brunei Investment Agency, or B.I.A., which invests the nation's oil wealth, and of Brunei's largest private company, Amedeo Development. Amedeo poured state money into building projects -- power stations, street lights and the country's cellular phone network -- helping to halve oil's role in the economy.

Amedeo built the playground at Jerudong, including the polo club, a country club, an amusement park and a $1 billion, 600-room hotel with real gold leaf on the walls, a saltwater lagoon and its own golf course designed by Jack Nicklaus.

It all began to unravel in 1997 with a mysterious rift between the brothers. In February, the sultan took over as finance minister. The next month, a former Miss USA and six other American women sued the two in an American court, accusing them of trying to turn them into sex slaves. The sultan denied the charges, and the case was dismissed on the grounds that the men had diplomatic immunity.

The suit was followed by a conservative crackdown in Brunei against un-Islamic practices.

In July 1998, the sultan fired Prince Jefri from the B.I.A. and Amedeo. Auditors went in to find Amedeo teetering under $6 billion in debts and $16 billion in losses. Worse, some Amedeo projects appear to have been financed or backed with B.I.A. funds. Last year, the sultan sued the prince to recover $15 billion he said had been misappropriated. The prince denied the charges.

Before the court could force the prince to shed light on the inner workings of the B.I.A., he and the sultan settled, with the prince agreeing to relinquish his assets in return for a $300,000-a-month allowance.

Outside the Jerudong amusement park, some of the prince's 2,000 cars can still be seen parked behind ''For Sale'' signs. The Jerudong facilities were put under private management, with the sultan handing over all but 93 of his ponies to an Indonesian company as part of the new equestrian center.

Cleaning up the Amedeo mess was devastating to the economy. Not only did it mean pulling the plug on the nation's biggest private-sector investor, but it forced the sultan to halve government expenditures.

Combined with slower oil exports, Brunei's economy shrank 4 percent in 1998. Rising oil prices have since pulled part of the economy back, but the nonoil economy remains in recession, and incomes and opportunities for new job seekers are falling.

Government officials say they hope the embarrassing financial fiasco will jolt the country from complacency. ''It's a blessing in disguise,'' Mr. Wahab, of the Economic Council Secretariat, said. ''These things have opened up our eyes.''

The sultan established the council in 1998, and last year it evolved into a 12-member secretariat charged with devising a more balanced economic diet. The secretariat's solution is to cut government spending and subsidies, privatize government-run companies and find new sources of cash -- even by issuing Brunei's first government bonds. At the same time, the secretariat hopes to stimulate the private sector by promoting Brunei as a financial center, tourist destination and high-technology center.

There are formidable obstacles, the first being that half the nation's work force is happy working for the government. Government salaries exceed most private-sector wages, according to Rosni Tungkat, director of the finance ministry's department of economic planning and development. And while government employees get low-interest loans to buy a car and a house, private-sector employees live with the risk of losing their jobs in a country with no unemployment insurance.

Despite having such a vast policy machine, Brunei's progress is hampered by one major bottleneck, critics say. ''At the end of the day, the sultan appears to be the one who makes the decision on every economic matter,'' said one economist, who, like almost everyone working in Brunei, insisted on anonymity. Government planners, he said, ''have this way of thinking very big and doing very little.''

Few policy planners even know just what resources are available. The B.I.A. discloses nothing; even talking about its investments is forbidden by law. ''I myself don't know how much we have or how much we have earned,'' Ms. Rosni said.

Gradually, progress is being made. The government has frozen hiring and replaced its pension plan with a national fund that applies to nongovernment workers as well, all to encourage more civil servants to take the plunge to the private market.

It recently opened the country's first toll road. There is even talk of charging for health care and education and instituting an income tax.

Also in the works is a local stock market, where the government plans to sell to private investors a bevy of state-owned agencies, from the national telephone operator to the airport. The secretariat is also considering the creation of a national oil company to explore for oil and refine it independently of Shell. Last month, the government inaugurated a program with several banks to provide low-interest loans to local entrepreneurs.

''This is what we've been waiting for,'' said Abas Mohamed, deputy president of the National Chamber of Commerce and founder of a Web design company. ''It will take another couple of years, but the entrepreneurs in Brunei will be stronger.''

The Ministry of Industry and Primary Resources, meanwhile, is struggling to lure foreign investment in everything from shrimp and poultry farms to dot-coms and pharmaceutical research, according to Matdanan Jaafar, director of the ministry's planning and industrial promotion department.

Mr. Matdanan acknowledges that interest has been low so far. ''Our incentives are not up to date,'' he said. ''And we also have a long approval process.'' To increase Brunei's allure, he said, the government is considering doubling its corporate-tax exemption for foreign investors to 10 years.

Mr. Matdanan says Brunei has a better chance promoting itself as an exotic destination for tourists visiting the rain forests of Borneo. Travel agents are less sanguine. While Brunei's ban on liquor is no deterrent, Marcel Boeni, a visiting Swiss agent, said its high prices and small size make it a poor alternative to neighboring Malaysia.

And while Jerudong's attractions are high on the list of potential draws, they are not likely to bring crowds, Mr. Boeni said. After all, he asked, ''Who rides a plane 17 hours to learn how to ride a horse?''

August 31, 1998

Sultan in trouble as world's richest ruler has to liquidate his assets

By Andrew Buncombe

The Sultan of Brunei, the richest man in the world until recently, has been forced to liquidate millions of pounds of investments to pay off debts.

Within the last month, the Sultan, Sir Muda Hassanal Bolkiah, has liquidated up to pounds 1bn worth of internationally managed investment portfolios to repay loans for which they were collateral.

In the last year, the man who can afford to have his Aston Martin sports cars flown to the British factory to have the engine oil changed, has seen his personal fortune fall by an estimated $2bn (pounds 1.3bn). He has also lost his title as Forbes magazine's World's Richest Person.

The unprecedented cash-raising measures have been forced on the ruler of the tiny South-east Asian state by a combination of the wide-ranging economic meltdown in the Far East and the collapse on the world market in the price of oil - the source of most of Brunei's wealth.

Just how serious his problems are is not clear as details of the Sultan's wealth are considered a state secret. Any problems the Sultan is facing will obviously be affected not only by the uncertainties of oil prices, but how long the recession in the Far East lasts.

Yesterday, it was reported that the state-run Brunei Investment Agency (BIA) had run down funds with Morgan Grenfell Asset Management, JP Morgan - the American investment house - Citibank and the Japanese bank Nomura.

"This is quite serious," said one source yesterday. "It clearly shows there is a cash crisis of some sort that he is having to deal with."

The Sultan himself is taking the matter seriously. The Independent has learnt that last month he called his investment managers to the capital of Brunei, Bandar Seri Begawan, for a crisis meeting. But the prices and the recession facing the former high-growth economies may only be part of the problem that is threatening the finances of the man whose name has become synonymous with vast, unimaginable wealth.

In recent months, the Sultan and his brother, Prince Jefri, have been locked in a bitter dispute following a series of allegations that the Prince was leading a wild and extravagant lifestyle, financially and sexually.

Earlier this summer, one of Prince Jefri's companies - Amedeo Development Corporation (ADC) - was closed with outstanding debts of up to pounds 10bn. Prince Jefri himself was ousted as head of the BIA, the last post of any importance he held within the state, and he has fled to the United States.

From there he claimed that his dismissal was the result of the increasing influence of conservative government advisers who wished to turn Brunei into a fundamentalist Muslim state.

News of the Sultan's asset liquidation comes as teams of accountants work through records in Brunei's Ministry of Finance to ascertain exactly how much the country is worth.

Senior partners from the accountancy firm, Arthur Andersen, have also been appointed by the Sultan as special managers and inspectors to a number of companies, including the now defunct ADC.

"Clearly things have not been going as they should," said a spokesman for the accountancy firm. "It will be the job of the managers and inspectors to go in and have a look at what has been happening and make their report and recommendations for the future."

Most analysts believe the Sultan's wealth and the general wealth of Brunei are one and the same thing - he technically owns all of the 2,200- square mile country - and any reduction of his personal fortune could hit the country hard.

The population, around 300,000, pays no income tax, social services are free and lavish while the education system includes grants for overseas education, and enables children from poorer homes to enter professions.

All this has been achieved from the wealth of oil, which started to make Brunei rich in the early 1970s. But some estimates predict oil reserves will last no more than a further 25 years. Pressure on the Sultan to create alternative wealth is growing and things will not have been helped by the latest developments.

Perhaps it is too soon to start feeling sorry for the Sultan. While he may now be only the second-richest man in the world, this is more to do with the inexorable rise of the wealth of Microsoft's Bill Gates, rather than a collapse of the Sultan's.

It is worth bearing in mind that although Mr Gates has built up a resounding pounds 31bn, the Sultan has a respectable pounds 22bn. And he earns more than pounds 70 a second.

He is still very rich.

Brunei prince fights to keep Nassim mansion

June 27, 2008

Worth at least $120m, it was used by the prince up to year 2000.

By K. C. Vijayan, Straits Times

The fight between Brunei’s national investment firm and the sultan’s brother, Prince Jefri Bolkiah, has reached Singapore’s courts.

The prize in this legal battle: the prince’s now-unoccupied Nassim Road mansion, worth at least $120 million and believed to have housed valuable artworks and other assets.

The prince, the younger brother of Sultan Hassanal Bolkiah, is already mired in tussles with the Brunei Investment Agency (BIA) over his assets elsewhere, including those in London and New York.

The BIA, which the sultan oversees, is the main agency holding and managing the Brunei government’s General Reserve Fund and its external assets.

In the fight for the Nassim Road property, the BIA is represented here by Senior Counsel Vinodh Coomaraswamy.

According to court documents filed in the Supreme Court, the BIA is seeking a court order to compel the 53-year-old prince to hand over the title to the premises.

The Registrar of Titles here requires a Singapore court order for the BIA to be registered as the legal owner of the mansion.

Prince Jefri, defended here by lawyer George Pereira, is contesting the application.

A hearing has been fixed for October.

The plush Nassim Road premises, named Arwaa mansion, were understood to have been used by Prince Jefri up to the year 2000.

The house, having been developed as a single structure from two back-to-back properties with different addresses, has entrances on two roads.

Although unoccupied, it is guarded round the clock by private security staff; cleaners are also there regularly.

In a bid to keep it in his possession, Prince Jefri is expected to argue, among other things, that Arwaa mansion was excluded, and therefore separate, from matters heard before the Brunei courts as part of the enforcement proceedings started there against him in 2004.

The prince, who left Brunei that year and now lives in France, is expected to ask the courts here to return Arwaa mansion to him.

His assets in London are still the subject of court enforcement.

Over in New York, a court ordered in March that he hand over ownership of the plush New York Palace hotel in Manhattan to the Brunei government.

It has been reported, however, that the court has barred its sale because the prince is disputing the order for a chance at ownership.

Oil spawns wealth, peace in tiny sultanate of Brunei

By Elliott Hester

June 29, 2003

I came to Brunei by accident.

While trying to book a flight from Darwin, Australia, to Bangkok, I happened upon Royal Brunei Airways, which offered the cheapest airfare. Rather than endure the eight-hour wait between connecting flights in Brunei, I decided to spend a few days in this tiny Muslim sultanate. Although at times I found myself rummaging around for something to do, I managed to see one of Southeast Asia's most remarkable structures and had the best hotel experience of my life.

The country's complete name is Negara Brunei Darussalam, which loosely translates as "Brunei -- abode of peace." And what a peaceful abode it is. Serious crime is rare, liquor is stringently forbidden, nightlife is practically nonexistent, and the country's largest city, Bandar Seri Begawan (population 60,000), seems to shut down before dark. (Even during the height of rush hour, when the streets were jammed with late-model Mercedes Benzes and BMWs, I never heard a horn honk.)

Located in the north end of the island of Borneo, Brunei is less than half the size of Rhode Island and supports one-third of that state's population. The 350,000 predominately Malay citizens are ruled by His Majesty Sultan Haji Hassanal Bolkiah Mu'izzaddin Waddaulah, better known as the Sultan of Brunei. The 29th in a long line of Sultans, he supports two wives and is believed to be as rich, or nearly as rich, as the world's richest man -- Bill Gates.

Abundant revenue from offshore oil wells at Seria and Muara has made the Sultan a multibillionaire. His people enjoy free education, free medical care, high minimum wages and no taxes. Everyone is entitled to a pension, as well as low-interest loans and subsidies for automobile purchases (which might explain the abundance of Mercedes Benzes and BMWs).

After checking into the Brunei Hotel's clean and relatively inexpensive digs ($32 U.S.) in the center of Bandar Seri Begawan, I walked the quiet streets and within less than an hour had seen just about everything. Aside from the Yayasan Sultan Haji Hassanal Bolkiah Complex, a posh shopping mall commonly referred to as the Yayasan, the city has three notable features: the water village of Kampung Ayer, the Omar Ali Saifuddien Mosque, and the Sultan's private palace -- which is off-limits to visitors.

Visible from nearly every vantage point in the city, the Omar Ali Saifuddien Mosque is a sight to behold. Built in 1958 and named after the present Sultan's father, the fortresslike edifice supports a huge golden dome, with several smaller domes perched high atop rectangular pillars. Inside the main dome lay a Venetian mosaic made of 3.5 million pieces. The walls are exquisite Italian marble, as are the floors upon which intricately woven prayer mats are laid.

Outside, I gazed at the mosque's shimmering image in the reflecting pool. As if on cue, the Muslim call to prayer (the adhan) began drifting from speakers suspended beneath the golden domes. Sung by a crier, or muezzin, the Arabic song has a rhythmic, mesmerizing quality that permeates the city five times each day.

A few steps away from the mosque lay Kampung Ayer, one of the city's famous stilt villages. Poised on rotting wooden stilts above the Brunei River, many of the shacks are crumbling, brightly painted wooden structures. Farther upriver is a proliferation of new, characterless, prefabricated shacks with concrete stilts. A maze of wooden plank walks connect the stilt villages to each other and to schools, mosques and mom-and-pop convenience stores. Half the city's residents live in these above-water communities. Each morning the typical villager walks the plank from his home, flags down a water taxi and crosses the river to a job in a city center.

After ambling aimlessly along the plank walks and receiving hesitant nods from residents along the way, I found myself with an empty itinerary and two nights remaining before my flight to Bangkok. Hoping to find a bargain, I called the Empire Hotel and Country Club (www.empire.com.bn), the best hotel in Brunei and a member of the Leading Hotels of the World. I was surprised to learn that the weekend rate for a standard room was only $131 U.S.

Three things struck me as I entered the Empire Hotel: the expansive lobby with a huge crystal chandelier in the shape of an inverted pyramid, an amazing marble floor motif, and the seven-story atrium, where white marble columns stand as tall as California redwoods.

My room was anything but standard. Like all of the 423 rooms and suites, it had a private balcony facing the South China Sea. The bed was fitted with fine Egyptian cotton sheets. The bathroom was a marble palace with a tub deep enough to drown in.

Because I don't play golf and didn't feel like bowling, I passed up the flood-lit, 18-hole course and the high-tech, six-lane alley. Instead, I walked next door and watched "Lord of the Rings: The Two Towers" at The Empire's lavish three-screen Cinema, furnished with deep leather sofas instead of chairs.

It was the best time I've ever had at a movie.

But my most vivid memory is the arrival of His Highness Shaikh Khalifa Bin Salman Al-Khalifa, prime minister of Bahrain. The hotel literally laid out the red carpet for him, and I stood at the edge of the carpet amid the crowd of oglers assembled at the lobby door. After an hour, he appeared. Dressed in a flowing robe and headdress, he stepped from a limousine with his entourage and was quickly whisked away by a team of hotel managers.

Later, I learned that the prime minister and his staff took 49 rooms, including the emperor's suite at nearly $13,000 U.S. per night.

I wonder if he got the weekend rate.

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