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.
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