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Index to Guardian articles on the Fayeds' purchase of Harrods

The Guardian 
Thursday, 8 March 1990

The DTI inspectors

Mark Milner
LYING to the Department of Trade and Industry inspectors ought to be sufficient reason for directors to be disqualified, according to the two-man team which carried out the House of Fraser investigation. 
    Mr Hugh Aldous and Sir Henry Brooke, QC, also concluded that the powers available to DTI inspectors should be reviewed in the light of problems which emerged during the House of Fraser investigation.
    The two men noted a number of areas where they felt the terms of the law ought to be reconsidered or where it was unsatisfactory or anomalous. 
    Mr Aldous and Sir Henry stopped short of formulating a series of specific proposals because they say "we consider that some of these matters at any rate need a more careful balancing of competing interests that is open to us, as to inspectors concerned with the problems of a single inquiry, to conduct".

    However, the thrust of their remarks indicated that they felt the powers granted to inspectors under the Companies Act needed to be strengthened. 
    The one clear recommendation which emerged is that "we…  consider that the giving of false evidence to Companies Act Inspectors ought to be made in itself a sufficient reason for disqualification of directors under modern legislation".

    The areas which the inspectors argue ought to be reviewed include those relating to powers to force the production of documentary evidence, access to private bank accounts and confidentiality of the investigation.
    They point out that while sections of the act create statutory obligations to give inspectors assistance "there is no sanction…  in respect of any breach of those duties".
    The inspectors also expressed surprise that while it was an offence to give false evidence to inspectors appointed under Section 447 of the Companies Act, it was not an offence to give false information to those appointed under Section 432 the section under which Mr Aldous and Sir Henry were appointed.
    "In our opinion this anomaly needs to be rectified, and punitive sanctions made available in the event that false information is furnished to such inspectors." 
    The report was completed by the inspectors in July 1988 but publication was delayed until the completion of inquiries by the Serious Fraud Office. 
    Yesterday the DTI pointed out that a number of changes had been made in the Companies Act which became law last year.

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