King Taufaahau Tupou: Declared Bogdonoff official jester

Later, the money came under the management of an American businessman, Jesse Bogdonoff, who impressed the Tongan king so much that he issued a royal decree proclaiming him official court jester.

But now, Mr Bogdonoff may be having the last laugh.

The Tongan trust fund, which was being held in a Bank of America account, has disappeared, and so has the jester.

Tonga's acting deputy prime minister, Clive Edwards, has told parliament his government was misled by its American adviser and he feared the country will now be a laughing stock.

Overseas account

The money was raised by the sale of Tongan citizenship and special passports to Asians, particularly Hong Kong Chinese worried about the handover to China.

It was placed in a Bank of America account after the king refused to keep it in Tonga, saying that the government would only spend it on building roads.

Some of the money was used to buy a royal property in San Francisco.

A government statement said the money was taken out of the bank in June 1999 and put into Millennium Asset Management in Nevada, whose president, secretary, treasurer, agent and trust officer, was one H V Hiatt.

Royal decree

At the time, it says, a Bank of America employee, Jesse Bogdonoff, became the Trust Funds advising officer, and was appointed court jester by King Taufaahau Tupou IV.

But the government statement has concluded that Millennium no longer exists and that the $26m, plus an additional $11m dollars estimated to be accrued interest, is gone.

Now the trustees of the fund are being asked some difficult questions:

• why they failed to notice that the five top jobs at Millennium were all held by the same person

• why so much of the country's foreign reserves was deposited into such a suspicious company.