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The Guardian 
Thursday, 8 March 1990

The House of Fraser's reply

Financial Staff

THE House of Fraser yesterday branded the DTI report as inept and unjust and reiterated that the Fayed brothers had paid for the group with their own money. 
    Its media director, Michael Cole, said: "Frankly we must say that we find this document shocking.  It is shocking in its ineptitude.  It is shocking in the extremity of its language.  It is shocking in its wrong-headedness and it is shocking in its injustice." 
    He said the inspectors, Sir Henry Brooke, QC, and Hugh Aldous, misled the company's lawyers, demonstrated prejudice and went far beyond their legal powers.  "They have held us to be guilty unless proven innocent.  In simple terms, they did not give us a fair hearing."

    Mr Cole said that not "so much as an unpaid parking ticket can be held up as evidence of wrongdoing" in the takeover.  "The Fayeds paid in cash, they paid in full, they paid with money which was their own.  The money was the Fayeds' own resources and no one else at home or abroad has any claim whatsoever to House of Fraser." 
    He said allegations that there was a mystery figure behind the takeover had not been supported with "so much as one scrap of evidence".  On whether the £615 million HoF takeover was actually funded by the Sultan of Brunei, a friend of Mohamed Al Fayed for many years, Mr Cole said the answer was "now and forever, no". 
    "The Sultan himself has confirmed this fact and delivered an affirmation of that fact under the Great Seal of Brunei," he said. 
    Mr Cole said that the inspectors' conclusions were not supported with facts.  "They have dishonoured themselves and the whole procedure of Department of Trade inquiries." 
    All those who had seen the report, and had 18 months to investigate it and follow it up, had concluded there was no cause for any action whatsoever, he said.  The only exception was Lonrho.  "When the inspectors confine themselves to their duties when they do their proper job their conclusions are favourable." 
    The inspectors had delivered to House of Fraser the final part of the case against it and had then asked for a written submission to be ready two weeks later.  They had led the company to believe there would be further exchanges. 
    "We could not believe it when we discovered that five working days after they had received our first and only written submission, they had delivered their completed report,"  Mr Cole said.  "The sad fact is that they had already made up their minds before they took the trouble to consider our case."

The Guardian
8 March 1990

The public's reaction
Dan Atkinson

THE devastating findings of the report were greeted with indifference throughout the Harrods department store yesterday. 
    Nothing, not even the damning conclusions of the Government inspectors, was allowed to disturb the orderly routine of mid-morning shopping in Knightsbridge. 
    In the calm of Harrods' corridors and halls, the usual mixture of businessmen, wealthy housewives and the occasional window-shopping day-tripper browsed, selected, purchased and gossiped, oblivious to the financial and political furore engulfing the proprietors of their favourite shop. 
    Indeed, few seemed aware of the owners' identity, let alone the methods by which they took possession of House of Fraser. 
    Typical was the reaction of the middle-aged woman in transit between the food hall and fashion accessories, in whose mind the words "inquiry", "DTI inspectors", "Lonrho" and "Fayeds" rang no bells.  "My husband reads the City pages," she said.  "I find all that sort of thing rather uninteresting." 
    A moment of alarm: "They won't close Harrods, will they?  No?  Oh, good." 
    Foreign visitors were even more bemused.  The Wisconsin businessman selecting jewellery for his wife had difficulty grasping the niceties of the British takeover process: "Harrods is a wonderful store.  I always come here.  Why does your Government want to investigate it?  What's there to investigate?" 
    A student, Sara Dearing, explained her own ignorance of the five-year House of Fraser controversy: "What takeover?  1985?  I was doing O-levels then." 
    One young man on the staff explained he was not supposed to talk to the press, adding: "We are very busy."  But one former Harrods employee, Andrew Stuart, had popped in to buy some biscuits, and he remembered the atmosphere during the early part of 1989 when Lonrho's campaign against the Fayeds moved into top gear. 
    He said: "Mohamed Al Fayed must have been a bit shaken by the whole thing, because he used to bring distinguished visitors down to the shop floor, embrace the nearest member of staff and say 'You like working for me, don't you?'
    "Actually, I think a lot of people did.  I liked it, but I was just filling in between jobs." 
    Outside, a cab driver wondered if the Fayeds had been trying to evade the poll tax.  "No?  So what's it all about, then?  Reckon they'll close Harrods?  No?  So what's the bother? 
    "I was in Egypt years ago, RAF station . . ."

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