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American Morning

Prince Jefri of Brunei Sells Off Royal Possessions

Aired August 15, 2001 - 11:35   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: A sale of princely proportions is under way in Brunei. The sultan's brother has lost billions of dollars and he's auctioning off some of his royal possessions.

For more, we're joined by Richard Paddock of the "Los Angeles Times." He's with us by phone from Jakarta, Indonesia.

Richard, hello.

RICHARD PADDOCK, "LOS ANGELES TIMES": Hello. How are you?

KAGAN: The stuff that is up for sale here doesn't look like the garage sales I have seen in my neighborhood.

PADDOCK: Well, there is a lot of high-quality items, and there is some junk, too. But if you wanted gold-plated toilet-paper holders or gold-plated wastebaskets, that would be the place to go.

KAGAN: Also some bigger items, like a jet.

PADDOCK: Well, there's an Airbus simulator and a Comanche attack helicopter simulator, and also a racing car simulator, a couple of Mercedes fire engines. But most of the things that they are selling had to do with Prince Jefri's business of building hotels, apartments, palaces and so on...

KAGAN: He is...

PADDOCK: ... in Brunei.

KAGAN: He is in the luxury hotel business. And one of the properties he holds is the Bel Air Hotel in Los Angeles. What's the status of his properties in the U.S.?

PADDOCK: Well, as far as I know, he hasn't been forced to sell anything to pay off of his creditors. He lost -- well, some estimates are as much as $16 billion during the 1990s. And a lot of people would like their money back.

But he's apparently avoided selling off assets outside of the country. But in Brunei, his development company was declared bankrupt. And so these things that are being sold are assets of that company. It won't go very far in paying off the debts. They might get $10 million, maybe even $20 million from the sale. But there will be a lot of creditors who are still not happy.

KAGAN: How did Prince Jefri get in trouble in the first place?

PADDOCK: Well, it's not really clear because much is not known about how the royal family there operates. He was the finance minister and also had his development company. Some people say he just didn't know the value of money and was very wasteful, building things when there was no market for them -- for example, a hotel in Brunei that cost almost $1 billion to build and has no likelihood of ever paying for itself.

So he also built an amusement park in Brunei for which he charged no admission just because he thought the country needed something like that.

KAGAN: And, real quickly, is this stuff that ordinary people in Brunei can buy?

PADDOCK: Well, the auctioneers, a British firm that came in, arranged it so that local people can get some of the smaller items. Some of the bigger items, like the marble slabs, more than 8,000 slabs of marble, are being sold through negotiated sales. The fire engine, those kinds of things, are being sold to bigger operators.

KAGAN: It would make for a unique holiday present, if nothing else.

Richard Paddock, from the "Los Angeles Times," thanks for giving us a peek inside this unique auction.

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