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The Observer
Sunday, 2 April 1989
Fayed: The sunshine test
MELVYN MARCKUS
CITY EDITOR
YES, Lord Young, we come out on Sundays too.
It has, for The Observer, been a satisfying week. For four years I and my colleagues Michael Gillard and Lorana Sullivan, have challenged Mohamed Fayed's claims, of vast inherited wealth and, specifically, his claim that the £615 million takeover of House of Fraser, the Harrods store combine, was purchased entirely out of his own liquid resources.
On Thursday morning The Observer printed 260,000 copies of the epic 16-page special report -- headlined 'EXPOSED THE PHONEY PHARAOH' -- in which we quoted extensive extracts from the House of Fraser report written by Department of Trade and Industry inspectors Henry Brooke QC and accountant Hugh Aldous.
All of which, dear reader, means that I am addressing what might be described as three separate audiences this week. Those who have read all, such as Lord Young; those who perused our special edition and are relatively well versed; and the majority of you who have so far been deprived of the benefit of the inspectors' undeniably riveting prose.
I cannot, alas, do much to enlighten the latter because, over here on Chelsea Bridge [the Observer's headquarters], we are awash with writs, inhibited by undertakings and constrained by injunctions.
We are long on injunctions (2) and even longer on libel writs, bearing in mind that the Fayeds have issued three law suits against The Observer and are threatening to serve a fourth. Surrounded as I have been for much of the week by a battery of lawyers, I believe I am still permitted to use a few old fashioned words. Such as: we stand by our allegations. These are, namely:
- Mohamed Fayed's claims that he purchased House of Fraser with his own liquid resources are false.
- His claims of vast accumulated wealth are false.
- His claims of distinguished ancestry are false.
- His claims in respect of the scale of his business interests are false.
An injunction from the Lord Young of Graffham, albeit most unwelcome, was not entirely unexpected. After all, The Observer believes the House of Fraser report should be published in the public interest. Young, who has sat on the House of Fraser tome since July, does not.
But far more sinister, to my mind, was Thursday morning's news that Mohamed Fayed, along with brothers Ali and Salah and House of Fraser Holdings (the Egyptian family's UK holding company) also felt compelled to seek an injunction. A panting Richard Rampton QC, representing the Fayeds, is understood to have arrived before Mr Justice Tudor Evans at approximately 11.30 to ask for an injunction (all packaged up in a Harrods carrier bag?) against The Observer and Lonrho.
Allen & Overy, the Fayeds' libel solicitors with whom we are all too familiar, busied themselves notifying the likes of WH Smith [major British newspaper distributors] of the existence of this legal instrument.
On Friday morning the DTI duly served its writ along with a supporting affidavit from Mallinson which stated:
'Although the Secretary of State wished to publish the report as soon as possible he decided that it would be inappropriate to do so until the prosecution authorities have completed their consideration.'
In Mallinson's words: 'It became apparent… that The Observer had obtained a complete copy of the inspectors' report.'
So much for Fayed mouthpiece Michael Cole's description of The Observer's special edition as 'a supposed account of an unpublished report.'
I may (and do) disapprove of the DTI's plot but at least the department has got its legal act together. By way of contrast, The Observer is still waiting for an affidavit in respect of the Fayeds' open-ended injunction. It would, after all, appear only reasonable for Mohamed Fayed to offer an explanation as to why he is so opposed to the inspectors' words finding their way into the public domain.
As it happens, Sir Edward Du Cann, Lonrho's chairman, possesses undoubted skills when it comes to matters which pertain to the public domain. By 11.45 on Thursday morning --at the time Mr Justice Tudor Evans was granting injunctions -- some 1,500 Lonrho shareholders had filed into the Great Room, in the Grosvenor House, not far from Mohamed Fayed's Park Lane residence.
Du Cann went to work. He let it be known that Lonrho had received -- unsolicited and anonymously a copy of the House of Fraser report. He then proceeded to unleash five of the findings of Sir Henry Brooke QC and Hugh Aldous into the public domain, albeit briefly because the injunctions were already winging their way towards the Great Room.
In the event, a letter from Du Cann -- which revealed that Lonrho was in possession of a copy of the House of Fraser report -- had already been dispatched to Young.
Under the salutation 'Dear David,' Du Cann urged Young to:
- Publish the report in full without further delay.
- Confirm the reference to the Monopolies and Mergers Commission in order that divestment can be effected.
- Expedite police enquiries
- Recommend that Harrods' Royal Warrants be withdrawn from Mohamed Fayed's name.
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