A trial began in Brunei's capital Bandar Seri Begawan this week of two bankers and two auditors on 17 counts that add up to a 1 billion Brunei dollar (US$455 million) fraud allegation.
It will inevitably involve the Sultan Hassanal Bolkiah, said by Fortune magazine to be the world's richest man with US$25 billion, and the Khoo family business empire of Singapore.Three months have been set aside for proceedings before a Hong Kong judge, Barry Mortimer.
The principals are represented by two London attorneys, Michael Corkery for the state and Colin Ross-Munro for the main defendant, Khoo Ban Hock, who was chairman of the National Bank of Brunei until its closure a year ago and whose family owned 75 percent.
These two lawyers are expected to earn at least US$250,000 between them if the case uses up the allotted time.
Mr. Khoo, together with senior N.B.B. manager Asian Robert Teo, a self- employed auditor Andrew Peattie and his senior manager Bernard Soo are variously charged in connection with allegations of excessive advances to Khoo-related interests (90 percent of the bank's entire loan account), failing to obtain adequate security and falsifying accounts.
The trial follows six months of investigations by a British audit team and interviews by the Australian fraud squad, following a news agency report last year.
This referred to the N.B.B. making a US$30 million floating rate issue in the Eurobond market, which it later called off.
The government thus got the first hint that something could be amiss at the N.B.B. because banks in Brunei need not resort to large-scale borrowing. Brunei is a tax-free net deposit center.
According to the Singapore Straits Times the Brunei Ministry of Finance and Khoo's lawyers might negotiate a deal in which the US$455 million in loans is repaid in return for some immunity.
But for Sultan Hassanal Bolkiah, whose brother Prince Sulfi Bolkiah was bank president until September last year, the trial shows that his tiny state is capable and willing to air publicly a high finance crime allegation.
Brunei, which was granted independence from Britain in 1984, is oil-rich. There is no income tax. Education and medical care are free.
The sultan lives in a palace said to contain 1,780 rooms and to have cost
Brunei's foreign exchange reserves total about US$20 billion and its 210,000 people enjoy per capita income of US$15,000.