Littlewoods family `spied' on directors

BPrivate detectives, hired by Littlewoods, the mail order, pools and stores group, have been gathering information on its senior executives, including Barry Dale, its chief executive until two days ago.

Sir Desmond Pitcher, chairman of North-West Water and a Littlewoods non- executive director, believes that he may also have been targeted, as does Prodip Guha, the group's deputy chief executive until last October.

The bizarre move, made on the instructions of senior members of the Moores family, who own every share in the giant £2bn company, appears to have been prompted by a desire to wrest back control from the day-to-day executives.

It has led to two sackings of key directors and ferocious board-room rows, plunging the group into management crisis.

Mr Guha went after he was secretly photographed meeting a journalist in Chester. Then, Mr Dale, whom the family decided to dismiss at a secret meeting at the Savoy Hotel in London last Friday, was presented with the private detectives' findings on him during a five-hour-long grilling on Tuesday.

Mr Dale was asked about his private life, his personal finances and his use of company perks. Mr Dale vigorously maintained that all the benefits he received were a matter of company record.

Also present were: Leonard van Geest, Littlewoods chairman; Reuben Berg, Mr Dale's lawyer; and, George McKillop, a director of Network Security Management, a London firm of private investigators. (Network was used by Lord Archer recently to examine the source of press reports about his Anglia television share dealings.)

Mr Berg said yesterday that his client had been dismissed "without explanation or justification. A key influence in this dishonourable episode appears to have been Network, a firm of private investigators appointed by Littlewoods, on whom Littlewoods appears to have an over-dependence."

Mr Berg said Mr Dale did not receive a pay-off - despite successfully running the group for two years.

Mr Dale was particularly incensed by an attempt - he does not know by whom - to obtain his itemised phone bill by asking for it to be sent to an address in London. Mr Dale, added Mr Berg, will be complaining to British Telecom as part of a "wide ranging" action against Littlewoods.

Mr Guha has already complained to BT and the police about calls made to friends and relatives from someone who appeared to be working from an itemised phone bill. The caller was asking who the numbers belonged to and how they knew Mr Guha.

Sir Desmond said yesterday that someone, calling himself "Jack Frost", recently rang his office at North-West Water trying to obtain details of his bank accounts. "He said he was called Jack Frost and was interested in my financial affairs. When we called the number he gave, it was Hambros Bank, the owners of Network. They had nobody called Jack Frost there."

Originally called in a year ago to investigate suspected fraud in Littlewoods store chain, a Network team has been in Liverpool, the company's home, ever since. After uncovering fraud and causing the dismissal of three managers, they were asked by the Moores to take on a new inquiry, to look at senior executives.

Attention focused on a deal struck in 1991 between Littlewoods and Lorad, a Far East trading group owned by Douglas Leese, an international "Mr Fixit" and defence expert.

In an effort to cut out the middle man, Littlewoods decided to source its buying direct, from factories in the Far East, using Lorad's contacts and systems.

Complaining it was not consulted properly about the deal and concerned about any linkage between the family firm and the arms business, the Moores secretly ordered an investigation. A Network team flew to Singapore, Lorad's base, to make inquiries.

So far, said one senior source, Littlewoods has spent £2.5m using Network. Last night, both Littlewoods and Network refused to comment on the private detectives' role.

The Littlewoods dynasty, page 3