Sale may be further fuel for a bitter feud
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Your support makes all the difference.THE House of Fraser sale may fan the flames of a bitter feud that has made other corporate battles look like fireside chats, writes Russell Hotten.
Tiny Rowland, observers believe, will jump on the flotation as vindication of his claim that House of Fraser was a 'panorama of chicanery'.
Ever since the Egyptian-born Fayeds snatched Fraser from under Mr Rowland's nose in 1985, he has sought to prove their 'true' background and source of money. For the Fayeds, Mr Rowland's avalanche of writs is part of the 'longest whinge in British commercial history'.
It all began in 1981. A bid for Fraser by Mr Rowland's Lonrho group was blocked by the Monopolies and Mergers Commission, and in 1984 Lonrho sold its 29.9 per cent stake to the Fayeds. But a later report, which Lonrho claims the Department of Trade and Industry received in February 1985, released Lonrho from its undertaking not to bid. The Fayeds made their pounds 615m offer for Fraser on 4 March 1985. Mr Rowland claims the DTI did not give Lonrho the go-ahead until 10 days later, when it was too late.
Mr Rowland was outraged, using his Observer newspaper as the mouthpiece for an assault on the Fayeds and the DTI, including the mid-week publication of an issue in 1990 devoted to exposing the brothers' 'financial ugliness'. It was based on a DTI report criticising the Fayeds for lying about the extent of their wealth and background.
A multi-million-pound damages claim was issued against the DTI and its former Secretary of State, Norman (now Lord) Tebbitt, alleging negligence in stopping Lonrho from mounting a rival bid for Fraser until the Fayeds had gained control.
As parliamentary pressure mounted for an examination of Fraser's tax affairs, speculation grew about the role of the Sultan of Brunei as the true source of the Fayeds' money. The Sultan admitted giving Mohamed al-Fayed power of attorney to acquire the Dorchester Hotel, but said use of that power to buy Fraser would have been 'without His Majesty's authority'.
Mr Rowland's campaign continued. In 1991 writs were issued alleging that the Fayeds were behind a five-year campaign of vilification. A Takeover Panel report in 1992 saying the Fayeds misrepresented their business interests only fuelled the slanging match.
Hopes of reconciliation came to nought, even though Fraser offered to remove the name Tiny from the stuffed shark hanging in the Harrods food hall. It was hardly likely to placate Mr Rowland. But for outsiders, it was one of the few jokes in this bitter saga.
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