|
The Observer
Sunday, 10 November 1985
An open letter to Leon
'Dear Mr Brittan,
I read with interest (as you might expect) your letter of 6 November to Sir Edward du Cann, Lonrho's chairman, in which you declare that Sir Gordon Borrie, the Director-General of the Office of Fair Trading, is "making no further enquiries" into the Al-Fayed/House of Fraser affair; that the "possibility of a reference" to the Monopolies Commission is "not under consideration" and that you see "no grounds whatsoever" for a companies act investigation.
I have also read (as you might expect) Lonrho's press announcement released on Thursday, which states that the company does not accept anything you have said regarding "the validity of the assurances relating to the offer for House of Fraser by Kleinwort Benson on behalf of the Al-Fayeds."
I think I have got the gist of the respective messages from yourself and Lonrho and, as Editor of The Observer Business section -- which has covered this matter extensively -- I would like to make a few points of my own in this open letter.
First of all, I would like to say that I would prefer to be addressing this correspondence to your predecessor, Norman Tebbit, who, in my opinion, utterly mishandled the Lonrho/Al-Fayed/House of Fraser situation during the crucial 10-day period between the announcement of the Al-Fayeds' £615 million take-over bid for House of Fraser on Monday 4 March 1985 and Thursday 14 March when he
a) declared that he had decided not to refer the Al-Fayeds' offer to the Monopolies Commission and
b) finally released Lonrho from its undertakings not to bid for House of Fraser.
I would put it to you that the inequality of treatment by your department of Lonrho throughout its seven-year quest to acquire House of Fraser (involving three Monopoly Commission references and the Griffiths share dealing inquiry) compared with the 10-day go-ahead for the Al-Fayeds' take-over proposal via their Liechtenstein controlled Alfayed Investment & Trust enterprise, is beyond dispute.
But such treatment has, to my mind, always raised the question: Why? Why for instance did Tebbit wait until 14 March -- three days after the Al Fayeds had secured control of House of Fraser -- to release Lonrho from its undertakings not to bid for House of Fraser?
After all, your department announced the Monopolies Commission finding that a Lonrho/House of Fraser merger 'may be expected not to operate against the public interest' on Thursday 7 March. Why did it take a week for Tebbit to act upon the Commission's findings? Did he forget about them? I am sure not, because on 11 March, Lonrho's chairman [Sir Edward du Cann MP] wrote to Sir Gordon Borrie asking for Lonrho to be released from its undertakings 'without further delay.'
As I wrote in an article entitled 'Harrods and the Sphinx,' on 17 March: '…the onus was on Tebbit and he now must now take responsibility for whatever pattern of events transpires at House of Fraser.'
I also wrote in that article that, in my opinion, the Al-Fayeds' £615 million cash take-over bid should have been referred -- or investigated by Department of Trade Inspectors.
That was my opinion then and I would like you to know that, after several months of painstaking inquiries into the Al-Fayeds' proclaimed resources, I am still of this opinion; utterly irrespective of Lonrho's ownership of The Observer.
Permit me, if I may, to return to your letter. I note your reference to the fact that 'Norman Tebbit explained in March the reasons for the decision not to refer.'
If I recall correctly, Tebbit's decision not to refer the Al-Fayed take-over bid to the Monopolies Commission was based on the view of Director-General Borrie and 'the statements made and assurances given by Kleinwort Benson.'
As you will be aware, The Observer has constantly questioned the assurances made by Kleinwort Benson; assurances such as those made by John MacArthur in an article entitled: 'Kleinwort reaffirms Al-Fayed ownership of House of Fraser' in the Financial Times on 25 June.
MacArthur was reported as saying: '…the Al-Fayeds had neither drawn on bank borrowings nor loans from any other party to make their purchase…' He added that 'the funds used for the purchase had been accumulated over many years by the Al-Fayeds…'
I am surprised that, as Secretary of State, you appear to show such little concern as to whether the above statement is correct.
I would have thought that the questions raised by The Observer, by Lonrho's chief executive, Tiny Rowland and, on 31 May by the Financial Times which stated that 'No one can be certain of the true beneficial ownership of House of Fraser' (before the Financial Times apologised for this conclusion on 25 June) might have raised doubts in your mind.
Might I conclude for the time being by expressing my regret that you have not seen fit to investigate in more detail the Al-Fayeds' claims of vast inherited wealth which The Observer has constantly challenged.
I, for my part, will continue my enquiries and I would like to take this opportunity that I do so quite independently of The Observer's proprietors, Lonrho.
I mention this because I note that Mohamed Al-Fayed has once again insinuated that The Observer's Business section is not independently edited. I would like to stress that I am a financial journalist of 20 years standing -- 16 of them under the proprietorship of companies other than Lonrho -- and I would hardly have written the articles, had I not wholeheartedly believed in my premise; namely, that the Al-Fayed take-over was not wholly financed with their own funds. I would go so far as to say that should it eventually be proven to my satisfaction that the Al-Fayed take-over was financed entirely out of their own so-called vast resources I would tender my resignation to my editor Donald Trelford. I would like to think that, should you prove wrong, you would consider similar action.
Yours sincerely,
Melvyn Marckus
|
|
