Fayed's clean-up trust is dissolved

A TRUST set up by Mohamed al-Fayed with pounds 1m to clean up British politics has been struck off for failing to file its accounts.

The trust, established just before last year's election to tackle sleaze, boasted a range of the great and good among its directors. They included two former Liberal Democrat MPs, David Alton (now Lord Alton) and Alex Carlile, and Professor Robert Nobay from the London School of Economics.

The trust's full-time secretary was Christopher Graffius, a former researcher for David Alton. Other directors included Michael Cole, Mr Fayed's press officer at the time, and Andrew Neil, former editor of The Sunday Times.

Mr Fayed announced he was putting pounds 1m into the project and others working with it believed he was prepared to give up to pounds 2m in the longer term.

During last year's general election campaign, the organisation sent mailshots calling for higher standards in public life.

It also asked candidates to sign pledges that they would not take "backhanders" from businessmen to act for them in the House of Commons or become slaves to their party whips.

At a meeting earlier this year, Mr Fayed, owner of Harrods, agreed to transform the organisation into a think-tank, which would produce policy papers and seek other sources of funding to enable it to become self- financing.

He placed one of his own accountants, Robert Fallowfield, on the board of the trust, but it did not fulfil its obligations under the Companies Act. Companies House records show that two reminders were sent and a notice placed in the London Gazette in May, but with no response. The People's Trust was dissolved and lost its legal right to trade as a company at the beginning of this month.

Last night a spokesman for Mr Fayed said the failure to file accounts had been a simple error.

"It appears there has been an administrative oversight on the part of our legal representatives. That being the case, we will look to rectify this on Monday morning," he said.

Others said Mr Fayed had lost interest in the trust after the death of his son Dodi in the car crash that killed Diana, Princess of Wales.

Mr Carlile said he had been on the verge of resigning from it. "It is something of a disappointment to me that the People's Trust ceased to function some months ago. At one time I thought it might become an important policy think-tank."

Another director said he feared Mr Fayed wanted to use it to dig up "sleaze" rather than to take a positive approach to raising standards in politics. "I understood it to be an organisation for political and social reform that would be looking particularly at issues such as the constitution, poverty in depressed areas and the standards of behaviour of our elected representatives," he said.

Although Mr Fayed is believed to have used the trust in recent months for one or two minor ventures, such as supporting an employee's legal case against his former employer, Mr Graffius was not replaced after he left in July 1997.

The Conservatives described the organisation's collapse as "an extraordinary example of double standards".

"They gave people the impression that they wished to impose higher standards in public life whilst failing to meet existing legal requirements themselves," said Christopher Chope, an industry spokesman.