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The Guardian 
Thursday, 8 March 1990

The Brunei connection
Ben Laurance
THE report stops short of concluding that the money used to buy House of Fraser in fact belonged to the world's richest man, the Sultan of Brunei.  But the inspectors say:
    "We are both of the clear opinion that the funds with which the Fayeds acquired HoF accrued to them through Mohamed's association with the Sultan of Brunei.  We are unable, on the evidence available, to say how they came into possession of those funds, but there is no evidence before us which would enable us to find that the Sultan knew what was happening.  He has issued categorical denials that he knew anything about it, and we have no reason to disbelieve him."
    Nevertheless, Mohamed Al Fayed did act for the Sultan in buying the Dorchester Hotel in 1984.  And secret tape recordings -- accepted by the inspectors as genuine -- revealed that in June 1985 Mohamed "asserted that he possessed a power of attorney from the Sultan which would enable him to draw $10 million, or even a $1 billion from a bank just as he wished".

    And the inspectors conclude: "The evidence pointing to Brunei is very strong indeed.  We have conveyed our findings to the Sultan.  Our views stand." 
    The Fayed brothers' relationship with the Sultan is well documented.  They are among a string of international businessmen who have built up a relationship with the Sultan, who has a fortune estimated at £15.3 billion. 
    The Sultan has two wives.  One is a cousin, whom he married when he was 19 and before he went to Sandhurst; the second is a former air stewardess with Royal Brunei Airlines. 
    Besides Mohamed Al Fayed, the Sultan has long-standing links with Adnan Khashoggi, the arms dealer, and Enrique Zobel, the Filipino tycoon who oversaw the building of his second palace with more than 1,700 rooms, 257 toilets and 564 chandeliers containing more than 50,000 light bulbs. 
    The Sultan, aged 43, has been on the throne since his father abdicated in 1967.  Brunei itself is tiny.  It sits on the northern coast of East Malaysia and has a population of about 230,000.

The Guardian
Thursday, 8 March 1990

Minister's statement
THE following is the text of yesterday's statement by the Trade and Industry Secretary, Nicholas Ridley, to the House of Commons.
    "I have today published the report of the inspectors appointed under Section 432(2) of the Companies Act 1985 to investigate the affairs of House of Fraser Holdings plc. 
    "I should explain to the House that in this matter I have three main responsibilities as Secretary of State:     "First, to decide whether to publish the report.  This I have now done, as soon as possible after I was informed by the prosecution authorities that they had withdrawn their objection to publication.
    "Second, I had to consider whether to apply to the court to disqualify any director under Section 8 of the Company Directors Disqualification Act 1986.  I have concluded that it would not be in the public interest to do so.  Anyone who reads the report can decide for themselves what they think of the conduct of those involved. 
    "Third, I also have responsibility for decisions on whether to refer mergers to the MMC.  That responsibility was fully discharged by my predecessor.  He had six months, from July 1988, in which to consider the finding of the inspectors' report and to decide whether to refer the matter.  He concluded, in November 1988, that a reference to the MMC would not be appropriate.  The House of Lords held that that was a proper decision.

I cannot reopen the decision taken at that time.  We have since taken steps in the Companies Act 1989 to make it a specific criminal offence for anyone knowingly or recklessly to mislead the competition authorities. 
    "No other matters require action from me.  I have passed the report to all those authorities concerned with enforcement and regulation, so that they may consider whether to take action under their various powers."

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