Tuesday, February 8, 2011

Power Struggle in Brunei?

Prominent Chinese businessman appears to be collateral damage

The oil-steeped Sultanate of Brunei is awash in reports that a turf war for power has broken out between Sultan Hassanal Bolkiah and his younger brother, Prince Mohamed Bolkiah, the minister of foreign affairs and trade.

The story started to come to light when Timothy Ong, one of Brunei's most prominent Chinese citizens, was suddenly and mysteriously cashiered from the acting chairmanship of the Brunei Economic Development Board. The board previously was under the control of the sultanate's foreign ministry. The agency was merged with the Brunei Economic Planning and Development Department, which in turn is under the sultan's control.

It is unclear how the Economic Development Board, a domestic agency promoting inward investment into Brunei, came under the foreign ministry in the first place. The board promotes the development of a variety of domestic target sectors, including the Brunei Methanol Plant and the construction of thousands of units of public housing.

Some critics on an electronic bulletin board in Bandar Seri Begawan have hinted that somehow Ong was involved in taking commissions on the housing, although no evidence of malfeasance has been presented.

Efforts to find out what happened have been stymied. According to one source, police and anti-corruption personnel are believed to have gone to the BEDB offices the day after the announcement to seize files and records, and another contingent of police personnel went to Ong's house to ask him to surrender his passport.

In an abruptly terminated telephone conversation, Ong, who was given the honorific title of Dato by the Sultan a couple of years ago during the Sultan's birthday celebrations, said he had no comment. Nor do authorities. Last week, after being out of the public eye for several weeks, Ong made a rare public appearance at the reopening of the newly renovated Brunei Hotel, which was partly owned by his family and reportedly recently sold to the family of the foreign minister.

"I am sorry, it is not for us to review about anything that happened in Brunei. We have confidentiality," said Ang Swee Kiang, senior assistant director of the anti-corruption bureau in an abbreviated telephone interview. "We reserve comment on any matters. I cannot reveal anything about anything else."

Brunei radio and television in late November announced that Ong had been summarily terminated from the chairmanship and, in the same announcement, that the economic development board had been removed from the foreign ministry control. The announcement was so sudden that a new deputy minister, Ali Apong, who was appointed to take over, was on the Hajj in Mecca when the news broke. Apong was previously with the prime minister's department.

Ong for several years was the publisher of the now-defunct Asia, Inc regional monthly business magazine. When the magazine wound down, Ong used the name Asia Inc. to organize business conferences around the region.

One source who worked with Ong at the economic development board told Asia Sentinel the businessman's removal from the board was so sudden and mysterious that no one at the board itself knows why it happened.

"Until recently no development projects happened without the Wazir's (Mohamed Hassanal's) consent," a Brunei source told Asia Sentinel. "With the sacking of Ong and the reorganization of the economic portfolio, Dato Apong reports to the Sultan. So his majesty has gained control of the economic agenda. This could be the prelude for more reorganisation, reshuffles and realignments."

The contest between the two extends down to rival newspapers, with the venerable Borneo Bulletin owned by the Wazir's family, and the sources say, projects him daily in a favourable light. The license for the Brunei Times, started three or four years ago, is said to be owned by Azrinaz Mazhar, a former journalist for Malaysia's TV3 television station and the sultan's former second wife. It is said to place more favorable emphasis on the Sultan's affairs.

Brunei, which depends for almost 60 percent of its gross domestic product and 90 percent of its exports on the oil and gas wells that steadily pump out 200,000 barrels of crude per day on land and in the South China Sea to the north, is no stranger to turf wars, or to scandals for that matter. Despite the sultanate's strict adherence to conservative Islam, a long string of leggy western beauties has sued the Sultanate or the multitudes of siblings and children, alleging they had been lured there for parties and ended up as sex slaves.

The sultan's brother Jefri is thought to have blown as much as US$40 billion in astonishingly bad or venal investments through the Brunei Investment Agency, which was responsible for investing the proceeds from the country's energy extraction, and Amedeo Development Corp., Prince Jefri's personal corporate plaything.

When Amedeo collapsed in 1998, Jefri decamped to England, where he remains, reportedly forbidden to return. The Sultan put up 10,000 items putatively worth US$17 billion in a debtor's sale that brought only about US$2 billion. A long string of lawsuits has continued ever since. The collapse of Amedeo actually triggered a recession in the tiny kingdom, which has about 380,000 inhabitants. "Public finances have yet to recover from the so-called ‘Jefri Scandal,'" said a 2003 report by the World Markets Research Centre.

According to sources in Brunei, the Wazir has been placing allies in a long string of ministries in his attempts to assert power. Perhaps the most important is Brunei Petroleum, which controls oil and gas concessions. In addition to the foreign ministry, Mohamed's allies include the head of the ministry of industry and primary resources, who was formerly his private secretary; the minister of and private secretary of the Culture, Youth and Sports ministry, both of whom were also his private secretaries at various times, and the deputy minister of Finance. In addition, two of the Wazir's sons are in the military and looking for promotions to top spots.

"Even if his majesty is the king, and the Foreign Minister controls Finance, Oil and Gas and Economy you can see who will wield the ultimate power," the source said. "Hassanal wants to take command of the economy from the Wazir at this time so he merged the BEDB with the Government's Economic Planning Department.

"The way it was announced shows that Ong was just a casualty of the reorganization."

Asia Sentinel

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