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(Continued from overleaf)
Mark Thatcher is also reported to have seen Fayed a few weeks ago while staying at the Carlton Tower hotel in London.
Two aspects of this matter may disturb MPs. One is that Mohammed Fayed and his two brothers were able to gain control of the House of Fraser within the remarkably short space of 10 days. The other is that, although the Monopolies Commission had by then given clearance, Mr Tebbit did not release the British competitor, Lonrho, from its Department of Trade undertaking not to bid for the company until three days after the Fayeds had taken over.
Shortly before Christmas, 1985, Mr R.W. Rowland, chief executive of Lonrho (and chairman of The Observer), wrote to Mr Tebbit's successor at Trade and Industry, Mr Leon Brittan, saying:
'I have been told that on 24 and 25 October, 1984, Mr Mark Thatcher visited Brunei, in company
with Mohammed Fayed.
A few days later the third House of Fraser inquiry and the Trade Department's embargo on a Lonrho bid
for the company were extended for a further 90 days. Mohammed Fayed was also inexplicably enriched
and before the end of October was offering me £100 million for my Lonrho shares, and £138 million
cash for our embargoed House of Fraser shares. It wasn't long before Mohammed Fayed was able to
boast: "and the British Government… they give me permission in 10 days."' Your letter to me
of 3 December, 1985, states that you are replying for the Prime Minister. I want it on record that you
have had an opportunity to answer.'
Two days later, he wrote furiously to the Prime Minister:
'Why have you had anything whatsoever to do with Mohammed Fayed?…
'We have a natural right to know why,' he said, the House of Fraser decision was made. 'In contrast with
Mohammed Fayed, Lonrho is a very large British company with 60,000 shareholders, against whose bid
no good grounds of objection were ever made, but whose offer was put under restraints, which
unbelievably were continued at the behest of your Minister, (Norman Tebbit), even after the clearance
of the Monopolies Commission.
'The damage suffered by our company was devastating, when you gave this man, who boasted to me that he
has never paid income tax anywhere in the world, what you denied to a long-established, internationally
known, public company which employs 150,000 people world-wide, and which has annually published
its accounts for 75 years.'
When Fayed made his £615 million bid for House of Fraser, it was unclear to many City observers who he was, or where he derived his funds. Fayed acted for the Sultan over the purchase of the Dorchester Hotel, which stands next to a Park Lane apartment block which Fayed owns, and where he lives.
He had wanted the hotel for himself, but conceded it, he says, because the Sultan expressed a strong personal wish to acquire the Dorchester directly, his parents having spent their honeymoon there. Mohammed Fayed inserted a 20-year management contract for his own company, which has been a subject of litigation.
The 38-year-old, Sandhurst-trained Sultan rules his 210,000 mainly Muslim, Malay subjects with the help of 2,000 Gurkhas and without the benefit of political parties. He is currently staying with his family, including his two wives, at the Dorchester.
Fayed was introduced to the Sultan by his spiritual adviser, Shri Chandra Swami, who acts as a guru to several heads of state, including President Mobutu of Zaire and a number of Far Eastern leaders.
The Swami, contacted by The Observer in London last week, said: 'Fayed is not a spiritual man like the Sultan, who is a young leader with great potential in South-East Asia and who wants to be of assistance to Britain. But he has been subject to some manipulation and exploitation, as was your Prime Minister in this case.'
By the middle of 1984, Fayed had gained the ear of the young and inexperienced Sultan, eclipsing other court advisers to such an extent that he had a power of attorney which put funds of $1.5 billion under his control.
These monies allegedly reached Fayed in stages, through a maze of his own Liechtenstein companies to the Compagnie de Gestion et de Banque Gonet in Switzerland (COGEBA) in August and September 1984, in a classic pattern of concealment.
When Lonrho was told by Mr Tebbit in November 1984, that its application to bid for House of Fraser had been delayed for another three months, the company was warned by counsel to divest its near-30 per cent shareholding before it might be ordered to do so at a 'forced sale' price. This holding was acquired by Fayed, the only offeror for the block of shares.
Lonrho began to build a new holding by market purchase of 6 per cent, against the outcome of the Monopolies Commission.
Kleinwort Benson, merchant bankers retained to act for the 'Fayeds in this bid for control of House of Fraser, stated that the funds belonged to the family alone, and it was on this (largely unsupported) evidence that the Director-General of Fair Trading, Sir Gordon Borrie, recommended to the Department that the bid should be allowed to proceed.
The Daily Telegraph, the Financial Times and The Observer have all carried articles casting doubt on the extent of the Fayeds' own fortunes.
Last April, the Sultan relieved Fayed of his power of attorney and relations between the two men were said subsequently by Newsweek to be 'strained.'
The publicity attaching to the Harrods deal has evidently embarrassed the position of the Sultan with his family and advisers in Brunei.
His embarrassment may be all the greater after the publication last Friday of an article in a New York paper, Jewish Press, which accuses his associate, the new owner of Harrods, of being anti-Semitic.
Fayed is also quoted as claiming credit for introducing Mrs Thatcher to the Sultan and arranging her visit to Brunei.
Fayed prides himself in the quoted conversation on the speed with which the Harrods deal was cleared -- 'they give me permission in ten days.' They did this, he says, 'because the British Government think Mohammed Fayed is up there, you know… up there inside Prime Minister…
'So three times we were with the British Government, myself and with the Prime Minister, are like that. Margaret Thatcher. He (the Sultan) know that I took him there. I made the Prime Minister go there, it was not in her programme when she goes there in March, end of March, beginning of April. She put and went there. I arranged it.'
Last night, Mark Thatcher was said to be in the United States. The office of his employer, David Wickins, said they could not contact him. Mr Fayed was not available for comment at his house in Park Lane, Mayfair.
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