KPMG faces a potentially punitive High Court injunction, issued by Prince Jefri of Brunei, to prevent it from revealing details of his private business interests.
Jefri, who lodged the application last Thursday, has dragged his former UK accountants into the centre of a row with his brother, the Sultan of Brunei, once the world’s richest man.
This spring, the prince was ousted from his position as chairman of the Brunei Investment Agency – which controls an estimated $60bn (#36bn) of the royal family’s overseas investments – in what he described as a plot by Muslim conservatives opposed to his western-minded reforms.
KPMG also acts as adviser to the BIA, and Jefri is understood to have pursued an injunction through the courts in a bid to prevent Arthur Andersen gaining access to details of his financial activities.
Andersens is investigating Brunei’s assets, and is understood to be probing Jefri’s interests in companies trading under the Amedeo Development Corporation name.
The Brunei government closed down Amedeo, which had debts of #500m despite controlling jeweller Asprey and a host of top-name hotels.
The prince’s writ, which was due to be expanded upon yesterday in court before a day-long hearing later this year, seeks to prevent KPMG, which refused to comment, from disclosing any ‘confidential information pertaining to his personal or financial affairs’ or authorising a third party to do so. If Jefri succeeds, KPMG would have to hand over details of any third party which has had access to the information.
The injunction, issued by City solicitor Lovell White Durrant, also seeks to prevent the firm helping investigators, such as Andersens, with its inquiries. Its final demand is for damages for any ‘misuse of confidential information’.
The writ strikes at the heart of client confidentiality – the central tenet of the client/ accountant relationship.
KPMG and English ICA rules forbid any disclosure of client details, even internally. There is no suggestion that KPMG has done so, but Jefri is understood to be unconvinced by the effectiveness of so-called Chinese walls.
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