Brunei feud hits Dorchester

Sultan wants London hotel to help curb his profligate brother

THE Dorchester Hotel has become embroiled in an effort by the Sultan of Brunei to rein-in the free-spending ways of his younger brother Prince Jefri as the tiny Asian sultanate faces a squeeze due to low oil prices.

According to City sources, the prestigious hotel in London's Park Lane is considering a financial restructuring designed to make it easier to send profits back to Brunei, and also to offset its profits against losses reported by other Brunei-owned hotels on the Continent.

In 1997, the last year for which results are available, the hotel reported a pre-tax profit of pounds 10.9m on pounds 46.3m turnover.

"What [the Sultan] wants to do is set up a single, more consolidated European hotel group," said one source.

This would rationalise the structure of Brunei's network of five-star hotels in various European capitals under the control of the Brunei Investment Agency (BIA), the arm of the absolute monarchy which is charged with managing the country's wealth.

But it would also make it more difficult for Prince Jefri to siphon off cash from Brunei-controlled hotels against the wishes of both his brother and the Muslim fundamentalist-influenced technocrats at the BIA.

To back up claims of a political agenda at work in the restructuring of the Dorchester, observers note that the Brunei-owned Beverly Hills Hotel in California is to be included in the European Hotels Group.

A former general manager of the Beverly Hills Hotel, Kerman Beriker, has brought a suit against Prince Jefri and other BIA officials for wrongful dismissal.

Business Week has reported that Mr Beriker fell out with his employers when he blew the whistle on "kickbacks that Jefri and other BIA agents were extorting from hotel suppliers".

Asked about the financial restructuring, Haislina Taib, the Dorchester's financial controller, denied that it was happening. When pressed, she replied: "I don't want to talk about politics."

Tensions between the Sultan and Prince Jefri date back to the early 1980s when Mohamed al-Fayed bought the Dorchester for the Sultan using a power of attorney and Swiss funds. According to published accounts, they erupted in 1993 when the Brunei royal family woke up to the fact that its $40bn (pounds 25bn) kitty, generated by revenues from a joint venture with Shell Petroleum NV and Mitsubishi, had dwindled by as much as half.

Brunei officials began freezing the assets of Amedeo, Prince Jefri's construction company which reportedly has lost between $2bn and $10bn. Prince Jefri was removed as the head of the Brunei Investment Agency.

Meanwhile, in London, Bob and Rafi Manoukian, Syrian businessmen selling luxury items to Prince Jefri, sued him for non-payment. In February 1988, before the case was settled, the High Court heard that Prince Jefri would hire 40 prostitutes at any one time to visit him in the Dorchester.