Brunei Sultan's lawsuit settled

Some of the secrecy has been lifted fom royal spending

The Sultan of Brunei and his playboy brother, whom he accused of vast corruption, have ended their three-month lawsuit with an out-of-court settlement.

The Sultan's brother, Prince Jefri, with others, was alleged to have misappropriated up to £23bn of state funds while he was finance minister.

An announcement on state television said that all Prince Jefri's assets at home and abroad, including several prestigious hotels, would be returned to the state.

It was an unexpected turn in the scandal, which had led to a public split between the 53-year-old Sultan Hassanal Bolkiah and his brother.

'Islamic plot'

The government described the settlement as a blessing, which would replenish state funds.

There was no immediate comment from Prince Jefri, who had argued that the case was a plot against him by Brunei's Islamic conservatives.

The sultan has fallen well down the rich list

When the lawsuit began in February, the prince's passport was impounded and he was made a virtual prisoner in his palace near the capital.

The prince's assets at home and abroad were frozen.

Early on, he demanded a monthly stipend of $500,000 for living expenses to maintain his four wives and 35 children. This was cut down to $300,000.

Cloak of secrecy

Top British lawyers were brought to Brunei to support both sides in the case, which was expected to last for many months - or even years.

By lifting the cloak of secrecy over the way the sultan's family spends Brunei's massive oil wealth, the lawsuit threatened to shake the tiny state to its foundations.

It was expected to raise questions in the minds of the 300,000 citizens of Brunei about the sultan's hitherto unchallenged right to rule their country like a feudal king.

Coffers emptying

Just five years ago, Sultan Bolkiah was rated as the world's richest man, with personal wealth estimated at more than $40bn.

Today, reports say he may be down to his last $10bn.

The decline in his financial fortunes may, in part, be explained by the Asian financial meltdown in 1997-8, which hit the value of shares and other assets, like hotels, which the Bolkiah family owned in the region.

Jefri's shopping list

Theme park

Yacht worth $500m

Six-star hotel

Jewelled watches

Artworks by Modigliani

The falling price of oil during this period, which accounts for most of Brunei's income, did not help.

But the biggest blow was struck by the profligate Prince Jefri, once the sultanate's finance minister and chairman of the Brunei Investment Agency (BIA).

The agency was supposed to divert oil revenue into profitable ventures to provide for the population when the oil runs out some time in the next 30 years.

Prince of fun

Prince Jefri established a company called Amedeo, apparently named after the artist Amedeo Modigliani, some of whose work the prince had bought.

He installed his son, Hakeem, as the managing director.

Amedeo had a responsibility to spend much of the BIA's funds on useful and remunerative projects.

Jefri Bolkiah: Lavish lifestyle

Instead, Prince Jefri built a lavish entertainment park, trimmed in Italian marble, together with a six-star hotel.

He ordered a yacht, at an estimated cost of $500m.

The extravagance of his lifestyle was unmatched anywhere in the world.

Amedeo collapsed under the weight of its debts in 1998.

Of the $4bn owed by Amedeo, at least $3bn is believed to be owed to the BIA.

With the price of oil now rebounding, Sultan Bolkiah should eventually be able to repair much of the damage done to the finances of the BIA by his brother.

It should also help him to maintain welfare provisions for his citizens - most of whom work for the government - which give them free education and health care, but asks for no taxes.