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Index to British press articles on the Fayeds' purchase of Harrods

This front page headline article, by the Observer's senior political correspondent Paul Routledge, heads an issue containing several articles on the paper's exposure of the Fayed brothers' fraudulent acquisition of Harrods.  This heavy coverage followed the publication a few days earlier on 30 March of the special mid-week Observer, which contained large extracts from the unpublished DTI Inspectors' report vindicating the Observer's reporting of the affair.

The Observer 
Sunday, 2 April 1989

Mrs Thatcher has summoned Lord Young, the Secretary for Trade and Industry, to a Downing Street crisis meeting tonight on The Observer's disclosures about the Lonrho-Harrods affair.  The summit will take place only hours after the Prime Minister arrives back from her gruelling tour of Africa.
    Although officials at Number 10 last night played down the importance of the talks, the speed with which Lord Young has been called in indicates that the Lonrho-Harrods battle -- and whether the DTI inspectors' report on the Fayed takeover of the House of Fraser should be published -- has shot to the top of the political agenda.
    Mrs Thatcher wants more than an update before Parliament reassembles on Tuesday.  Her intervention suggests she intends to take personal control of what turned from a routine, if bothersome DTI matter into a potential 'Spycatcher' affair, with the Government trying to keep up a court ban on publication of the controversial report in the face of a special midweek issue of The Observer. 
    The Trade and Industry Secretary, under strong pressure from the Opposition and some of his own back-benchers to 'publish and be damned', is understood to be reconsidering his decision not to release the report. 
    A source close to the Minister said yesterday: 'He is having to reconsider his decision as to whether or not to defer publication.'  A DTI spokeswoman confirmed that the Secretary of State, relaxing in his Sussex retreat, had the matter under consideration.  'Lord Young is a reasonable man who would be expected to keep these matters under review.'
    There is also pressure on the Serious Fraud Office from the Attorney-General, Sir Patrick Mayhew, to speed up their investigation of Mohamed Fayed and the manner in which he and his brothers took over the House of Fraser group after the Government blocked a rival Lonrho offer.  The Government's top law officer wants a speedy decision on whether and what criminal charges may be brought. 
    The SFO probe into the nine-month-old DTI report has been relied upon by Lord Young as grounds for not publishing the 752-page document, which has been on his desk since last July.
    Pressure on Lord Young is coming from three directions.  The influential Tory backbencher, Mr Teddy Taylor, has put down a Parliamentary question calling for publication of the report and a reference to the Monopolies and Mergers Commission, which alone has the power to divest the Fayed brothers of the ownership of Harrods.
    Opposition pressure is also being applied.  Labour's industry spokesman, Mr Brian Gould, is asking for a statement and, in the Lords tomorrow, Lord Williams of Elvel, Labour's shadow to Lord Young, will table a private notice question asking the Government to lift the injunctions and publish the DTI report.  Because procedures in the Upper House are different, the issue is guaranteed an airing even if the Leader, Lord Belstead, refuses a debate.
    The third pressure point lies in the Commons Select Committee on Trade and Industry, which on Wednesday hears calls for Lord Young to be summoned to give an explanation of the DTI's conduct in suppressing publication through the courts.
    The political situation is complicated by legal actions.  Lawyers for the House of Fraser have until 9a.m. today to file evidence in support of the Fayeds' injunction against The Observer and its owners, Lonrho, unsuccessful bidders for the stores group in 1985.
    Tomorrow, Lonrho will ask Mr Justice Tudor Evans to lift or vary the injunction granted to the DTI last week banning publication or dissemination of the report.  On 10 April, the Lords will rule on Lonrho's appeal against a Court of Appeal reversal of a High Court ruling that Lord Young should publish the report and refer the issue to the MMC.
    Whatever the court hearings determine, the Industry Secretary retains ministerial freedom to decide on publication, and politicians on both sides believe that -- as the DTI considers itself virtually unscathed by the long inquiry -- he could reap some advantage by coupling publication of the report with an announcement of reforms in company law.
    The Government already has a Companies Bill which is due to return to the Commons shortly, and Mr Gould insisted: 'We want amendments to strengthen the law.  It would be quite outrageous to deal with the Bill in ignorance of the recommendations of this report.  This is an extra argument for publication.
    Sir Edward du Cann, chairman of Lonrho and a former Trade Minister, has complied in part with Lord Young's demand for the return of copies of the DTI document, leaked anonymously to the company 10 days ago.  He said yesterday: 'Lord Young should instruct his officials, particularly junior officials, to stop trying to gag the policeman and letting the burglar go free.'
    Apart from the SFO investigation, the Crown Prosecution Service is examining the veracity of answers given by the Fayed brothers to the DTI inquiry.
    The DTI report was ordered by the then Secretary of State for Trade and Industry, Paul Channon, on 9 April 1987 to investigate whether the Fayed brothers were who they claimed and whether they had sufficient unencumbered funds of their own to purchase House of Fraser.  During the inquiry the inspectors addressed themselves to more specific issues, including the role and accuracy of The Observer's reports and the part played by the Fayeds' financial advisers.

Special Observer mid-week edition

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