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The Observer
Sunday, 2 April 1989
Four years of journalistic investigation
THE PAPER'S ALLEGATIONS
by LORANA SULLIVAN
What the Observer has said about Mohamed Fayed:
- 10 March 1985:
"The OFT's line of questioning, in view of the flak flying around the Fayeds' £615 million sorties, will not be so much: Is the cash at hand? But rather Whence it comes?" 'The bloody Harrods battle by City Editor Melvyn Marckus. The Fayeds issue a writ.
- 17 March, 1985:
Questions were raised concerning Mohamed and Ali Fayed's employment by Saudi arms dealer Adnan Khashoggi; Mohamed Fayed's former links with Mahdi Al Tajir who wielded considerable influence with the ruling family of Dubai; the extent of the Fayeds' shipping interests, and Mohamed Fayed's business dealings in Haiti. We concluded that the House of Fraser bid by the Fayeds should have been referred to the Monopolies & Mergers Commission or investigated by Department of Trade inspectors. 'Harrods and the sphinx' by City Editor Melvyn Marckus. This article is subject to a second writ.
- 3 November 1985:
Disclosed the contents of a memorandum dated 16 November 1984 from Kleinwort Benson, the Fayeds' merchant bankers, to the Office of Fair Trading listing the Fayeds' assets. 'Its analysis… is sketchy to say the least,' the author noted. This was the first hint of the superficial nature of Kleinwort's investigation of the Fayeds' background. 'Rowland's $1.5 billion allegation,' by City editor Melvyn Marckus. This article is subject of a third writ from the Fayeds.
- 10 November 1985:
Marckus stated in an open letter to Leon Brittan, the then secretary of state for Trade & Industry, that he continued to make inquiries into the Fayeds' claims totally independently of Lonrho. He concluded: "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 would hardly have written the articles, had I not wholeheartedly believed in my premise; namely that the Fayed take-over was not financed with their own funds. I would go so far as to say that, should it eventually be proven to my satisfaction that the 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." 'An open letter to Leon', by City Editor Melvyn Marckus. This article is subject of a writ.
- 4 May 1986:
Article revealed that House of Fraser Holdings, the Fayeds' UK holding company, was borrowing heavily. Two months previously borrowings of £430 million had been refinanced by a syndicate of banks led by Samuel Montagu. The article again queried whether the Fayeds' wealth was as vast as they represented it. 'Fayeds called to account on loans' by City Editor Melvyn Marckus and Lorana Sullivan. This article is subject of a writ from the Fayeds.
- 15 June 1986:
The myth of the Fayeds' vast inherited wealth and privileged family background was exploded. The article revealed that the Fayeds were sons of a teacher and grew up in a modest district of Alexandria, in El Gomrock. "El Gomrock people remind you of London's East Enders -- very friendly, hard-working and helpful people, who, however, tend to stick together when an outsider makes inquiries about one of their own. 'Why are the Fayeds not proud of having lived in Gomrock and made their way to England?' asked a young student who lives in the Gomrock." 'In search of the fabulous Pharaohs' by Peter Wickman.
- 12 April 1987:
revealed that House of Fraser Holdings' consolidated borrowings had climbed to £739 million by the end of its 1986 financial year and that the company suffered a £37.4 million pre-tax loss after paying interest of £56.7 million. After tax relief, the loss was £20 million. 'Fayeds' £20 million loss' by Lorana Sullivan
- 2 May 1988:
Disclosed that House of Fraser Holdings suffered a pre-tax loss of £35.3 million in the year to 2 May 1987, after interest charges of £52 million. Group consolidated net borrowings rose to £934.7 million, while group consolidated interest costs reached £83.3 million. 'Fayed's HoF losses mount' by Lorana Sullivan.
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