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(Continued from overleaf)
The SFO is therefore examining the extent to which criminal offences may have been committed as a result of which the Fayeds' cash offer was recommended by the HoF board and the takeover cleared by the OFT and Norman Tebbit.
It is understood that the SFO have been examining the possibility of bringing charges under the Companies, Theft, or Prevention of Fraud (Investment) Acts. The PFI has since been succeeded by the Financial Services Act. A complication, and cause for much legal debate, is to decide who was deceived.
The situation is complicated by the fact that there is no suggestion that HoF shareholders were persuaded to sell their shares at less than their real worth. The 400p a share price was considered fair. A prosecution would have to prove who was a victim of the deception or whether an advantage had been gained by it.
The offer document, because it was an all-cash offer, may not have been covered by the PFI Act but by the Takeover Code and the Stock Exchange requirements. Though not having the force of law much is incorporated in the Companies Act.
The statements in the offer document and those made in November 1984 and March 1985 submissions to the OFT, containing the Fayeds' claim to be from an 'old established Egyptian family' and details of their alleged business empire, were not produced under oath.
As to the evidence given by the Fayeds to DTI inspectors Henry Brooke QC and chartered accountant Hugh Aldous, the test for bringing any charge of perjury would be proving that the perjury was material.
While having access to the testimony and evidence provided to the inspectors, the Fraud Squad must still carry out its own further investigation. This is because the standard of proof required to bring a criminal case would be much higher than that required for the inspectors to make their findings.
Information concerning the SFO/Fraud Squad investigation was developed by The Observer without any reference to the DTI report.
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