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The Observer
Sunday, 4 September 1988
A HERO FROM ZERO
MELVYN MARCKUS
CITY EDITOR
MOHAMED Fayed's first aggressive move against Lonrho, in preparation for his controversial (by way of an understatement) £615 million takeover bid for House of Fraser, was to press for Tiny Rowland's resignation from the board of the Harrods store combine way back in the autumn of 1984.
Fayed, armed with the votes which accompanied the near 30 per cent House of Fraser share block purchased from Lonrho for £138 million, presumably expected a degree of flak to fly from the area of Cheapside -- home of Lonrho -- but never, even in his wildest bodyguard-protected nightmares, could he have imagined the enormity of the campaign Rowland would wage over the claims -- of inherited Pharaonic wealth and the like -- which he was already purveying from 60 Park Lane.
On Tuesday Lonrho, which has already published and distributed a wealthy of soft cover literature concerning the life and times of the Egyptian proprietor of Harrods (such as 'The Sultan and I by Mohamed Fayed'), produced a 185-page epic entitled: 'A Hero from Zero -- the Story of Kleinwort Benson and Mohamed Fayed.'
Champagne
On Wednesday the Financial Times, the Independent, the Guardian and the Daily Telegraph duly reported Rowland's latest salvo. I will attempt to do the same -- albeit with difficulty. The difficulty is of a legal nature in that The Observer, which is owned by Lonrho, has been served with a series of writs (in contrast to the champagne and caviar served up to our rivals) by the same Liechtenstein Pharaoh. Fayed's shipping empire may be all but invisible but the same, alas, cannot be said of his lawyers. Not only have writs -- all of which are being defended -- rained upon us but, in the summer of 1986, Fayed attempted to prevent The Observer from publishing further articles relating to our consistent allegation that the House of Fraser acquisition was not financed entirely out of the Fayed family's own liquid resources. Fayed lost the case -- and paid the costs -- although the Observer gave a voluntary undertaking to the court not to reiterate certain other allegations without giving notice of our intentions.
I find it faintly ironic that, as the City Editor who first called for a Department of Trade and Industry investigation into the Fayed/House of Fraser affair back in 1985, I may have to overcome a host of legal obstructions in order to report on the findings of the inquiry which was eventually ordered by former Trade & Industry Secretary Paul Channon some two years later in the spring of 1987. No thanks to Brittan's predecessor, Norman Tebbit. Many thanks, I suspect, to the advent of last year's June General Election.
Meanwhile, publication of the 750-page DTI report, compiled by Henry Brooke QC and accountant Hugh Aldous, waits on Lord Young's return from Australia. Instead, in the interim period, so to speak, 'A Hero from Zero' emerges complete with glossy photographs. This Fayed/House of Fraser family album includes, inevitably, a photograph of the Sultan of Brunei, much of whose face, above the moustache, is unfortunately hidden by the peak of a military cap. Even fabulous wealth, it appears, can't buy everything.
Rowland's foreword, in which he contrasts the Department of Trade's treatment of Lonrho in its quest for House of Fraser with the way in which Tebbit 'pushed another pony past the post' in the space of 10 days, was published in The Observer last month under the title: 'The Harrods Scandal'.
The humour in Rowland's foreword, reflected in his recollections of Sir Godfrey Le Quesney's Monopolies Commission hearings -- 'What am I doing here, I thought, as I gazed by the hour and by the month at the hole in the sole of his leather shoe, and wondered why Lonrho's bid was in the hands of a man who couldn't organise his own shoe repairs' -- resurfaces throughout.
Much of Rowland's perspective on the Fayed/House of Fraser affair appears in fairy tale language and the first chapter, entitled 'The Takeover', sets the tone and starts as follows:
'In early 1985, the board of House of Fraser assembled at the Army & Navy Stores [a House of Fraser subsidiary]. But that was not where decisions were made. The future of House of Fraser had already been decided, at meetings between Professor Smith, Mohamed Fayed and Kleinwort Benson.
'During the preceding three months, Professor Smith had been a regular visitor to the home of House of Fraser's biggest shareholder at 60 Park Lane. There, in between the potted orchids and the perfume-injected air, was the delicious smell of lots of money, and it attracted many, many influential visitors from the City and from politics.
'Fantasies'
'Fayed was busily putting together his scheme. It was necessary to assemble a slam hand and engage Kleinwort Benson to play it. He had already been well introduced to 10 Downing Street by Sir Gordon Reece, whom he was paying handsomely. It paid off -- although Fayed hadn't liven in Egypt for 25 years and was unknown there, he had been invited as 'an eminent national of Egypt' to the Prime Minister's dinner party for President Mubarak, and placed at the side of Carol Thatcher.'
Thus begins Lonrho's nine-chapter publication under provocative sub-titles which range from 'Pharaonic Fantasies; Invisible Wealth' to 'Hapless Harrods; A Catalogue of Mismanagement'.
If the photograph of the Sultan -- for whom Fayed once upon a time held various powers of attorney -- does little for him, the prose does even less, particularly in respect of his £600 million palace which Peregrine Worstehorne, editor of the Sunday Telegraph, recently described as a 'spectacularly vulgar edifice'. According to Lonrho the palace 'can only be described as a car park with a token gold dome and a minaret on top'. Fabulous wealth can buy certain things and the Sultan's palace is reputed to house more than 800 cars.
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