Mr Brown also allegedly received £75,000 himself from the London company, which provided a £2.4 million donation to the Lib Dems. HSBC has brought an action against 16 parties including the four investors: they are Mr Edwards, the Chinese cosmetics tycoons Yan Lucy Lu and Kevin So, and a retired US lawyer, Robert William Mann. It wants them to indemnify the bank over any potential losses. The investors have responded by countersuing the international bank.

The action began last October with a search order and worldwide freezing of Mr Brown’s assets. Nobody can get their hands on his investments until a High Court trial takes place, scheduled for a month-long hearing in October. HSBC claims it moved within days of discovering that Mr Brown had allegedly procured employees to sign and place its stamp on letters purporting to contain instructions on behalf of investors.

These letters implied that the investors’ money would be kept separate from money to which anyone else might be entitled. Rather than being held in segregated accounts, money was mixed, HSBC alleges. Occasional payments of “profit” were made back to investors whereas in fact there is no independent evidence yet of any such profit having been made.

The bank claims that the Glasgow-born Mr Brown, 40, well knew that its employees had no authority to sign or stamp the letters, let alone to commit it to legally binding obligations. He may be liable for having procured a breach of their contracts of employment.

The millionaires claim that HSBC is liable to return their investments because it indicated that their money would be safe. They claim that an HSBC official wrote a letter on headed paper providing a reference for Mr Brown to the Chinese tycoons, describing him as “a client in good standing”.

Mr Mann says that, after a lunch with Mr Brown at the Caledonian Club in London, he was introduced to the HSBC official who described the Scotsman in glowing terms as a highly valued client. Mr Mann, a Harvard-educated, retired Los Angeles tax lawyer with an MBA, invested $5 million.

Ms Lu, who lives in Toronto, claims to have been told that if she and Mr So, from Hong Kong, were to invest, their funds would be held in a unique, secure, numbered account. The Chinese investors handed over $30 million but were keen to be assured their money would be kept segregated. Told about this by the bank official, Mr Brown replied to her by e-mail: “They were not informed that the account was segregated in their favour, and as such if I wanted to naff off to Barbados with the fund; technically I could do so! Ho Hum another bites the dust.”

There is a dispute about whether Mr Brown meant the clients had pulled out of the investment or had agreed to his terms that then money could be mixed with other funds.

Mr Brown said that he would respond to the pair himself. Next day, he e-mailed the HSBC official stating: “After much humming and hawing with the Chinese chappies, I believe that they now understand the position.”

An article in The Times appears to have aroused the bank’s suspicions after a proposed settlement emerged last November that would involve the investors indemnifying HSBC. “We are concerned to establish that the individuals concerned in the giving of the indemnities are the same individuals who have title to the funds,” Robert Hunter, of HSBC’s lawyers Allen & Overy, wrote to Mr Brown’s solicitor.

To: michael.brown@5ave.ch
From: Anna Werrin (Charles Kennedy’s principal aide)
Subject: RE: Razall
Michael: I didn’t know that you hadn’t received a written breakdown. Tim mentioned it to me when I was on holiday. I then raised it with Chris Rennard (who as the Chief Executive is the man who actually has the information) and he promised he would get it off to you. I didn’t chase it when I got back from my holiday and assumed it had been done - for which I apologise . . . You should have received it months ago and there is no excuse other than ineptness. Sorry.

From: Michael Brown
To Anna Werrin
Subject: Razall
THE INEPTNESS LIES IN THE ENTIRE ORGANISATION NOT KNOWING WHAT EACH OTHER ARE DOING . . . I GAVE YOU PEOPLE 2.4M WHY SHOULD I CONTINUOUSLY CHASE UP MY OWN GOODWILL. SURELY THE LIBERAL DEMOCRATS WOULD HAVE WANTED TO KEEP ME HAPPY

To: Michael Brown
From Anna WERRIN
Sorry. Yes - you’re right we cocked up. There are no excuses. you should have received the information from Chris back in May. So - mea culpa. ... If you ever have an issue with the Party or with Charles (all of which assumes a future contact you may not wish to have) tell me and I will try to sort it.