Mohamed Fayed’s casual relationship with the truth held back his business achievements
Little has been heard from Mohamed Fayed during the last decade.
He sold Harrods to Qatar Holdings as long ago as May 2010 and his other main trophy asset in the UK, Fulham FC, was offloaded to the US businessman Shahid Khan in July 2013.
That latter deal brought down the curtain on a controversial – to say the least – career during which he had been a prominent figure in British business for nearly 30 years.
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Fayed (he added the honorific ‘al’ to his name, despite having no right to, after he arrived in the UK in the 1960s) remains best known to the general public for the relationship his late son, Dodi, enjoyed with Diana, Princess of Wales and for the corrupt payments he made to MPs to ask questions on his behalf in parliament.
Before that, though, the Egyptian tycoon had become a notorious figure in the City and in British business circles for his unorthodox approach and his somewhat casual relationship with the truth.
Many people, including some who should have known better, bought the story that this son of a primary school teacher was, in fact, the expensively educated scion of one of Egypt’s richest shipping families – although he did, in the end, accumulate a fortune the size of which was never entirely clear.
Founding his fortune
That fortune was founded on his early dealings with Adnan Khashoggi, a wealthy Saudi arms dealer, whose sister he married and later divorced.
After working for Khashoggi, his ability as a deal-maker drew him to the attention of the Sultan of Brunei, for whom he worked for a while and under whom he accumulated sufficient wealth to acquire a shipping agency.
He later sought to establish an oil production business in Haiti, posing as a Kuwaiti sheikh, before the samples he had hoped might be crude oil turned out to be molasses.
He eventually had to flee the island after falling out with its monstrous dictator ‘Papa Doc’ Duvalier.
After acting as a middleman in more deals in the Middle East, Fayed pitched up in London, again posing as an Arab sheikh and setting himself up in an apartment on Park Lane.
Many were taken in by him. He and his brother, Ali, had sufficient funds or backing by 1978 to buy the Ritz hotel in Paris for $30m.
The nastiest and dirtiest takeover battles in history
What really put him on the map though, so far as the City was concerned, was the saga which began in November 1984 and which turned into one of the nastiest and dirtiest takeover battles in history.
The mining conglomerate Lonrho, which owned a sprawling portfolio of assets across the world but primarily in Africa, had for years been trying to buy Harrods – then owned by the House of Fraser department store chain.
Its chief executive, Roland “Tiny” Rowland, had built a 29.9% stake in House of Fraser as a prelude to a takeover bid for the company – which was referred to the old Monopolies & Mergers Commission by Margaret Thatcher’s government.
Mr Rowland, who had been famously dubbed “the unacceptable face of capitalism” by the former prime minister Edward Heath, knew the referral could be tricky.
So he hit on the wheeze of “parking” the stake with the Fayed brothers.
Unfortunately for him, he was double-crossed by Mohamed who, backed by the Sultan of Brunei, used the stake to launch a £615m takeover bid of his own.
He acquired the business and, in the process, deprived Mr Rowland of a treasured asset he had been stalking for the best part of a decade.
An enraged Mr Rowland waged a campaign against him thereafter to obtain revenge on the ‘”phoney pharaoh”.
The Department of Trade & Industry investigated the takeover and, when Mr Rowland obtained a leaked copy of its report, he published it in March 1989 in a special midweek edition of The Observer, the world’s oldest Sunday newspaper, which was at the time owned by Lonrho.
The DTI report pulled no punches.
A ruined reputation
In their most damning line, the DTI inspectors said the Fayeds had “dishonestly misrepresented their origins, their wealth, their business interests and their resources to the secretary of state, the Office of Fair Trading, the press, the House of Fraser board, House of Fraser shareholders and their own advisers”.
It forever ruined Fayed’s reputation and, arguably, ensured that he was never given the British passport he craved for so many years.
Two years later, in an unprecedented move, the Bank of England forced the Fayed brothers to relinquish control of Harrods Bank after deciding they were not fit and proper people to run a deposit-taking institution.
However, despite Mr Rowland’s best efforts, Mr Fayed retained control of Harrods.
He gave up his fight in 1993 when, just before Christmas, he and Fayed publicly embraced in the Harrods food hall.
Months later, Mr Fayed floated House of Fraser on the stock market, but kept Harrods.
Harrods
Troubled time at Harrods
The first two decades of his ownership of the department store were troubled.
Profits fell and Fayed was variously accused of electronically eavesdropping on employees and of firing minority employees with no cause.
Mr Rowland also alleged that papers he had kept in a security box at Harrods had been stolen and, while the police never charged anyone, damages were ultimately paid to Mr Rowland’s widow.
By the turn of the century, the business was in a bad way, with Mr Fayed’s management style ensuring a vast turnover of top management.
Between 2000 and 2002, Harrods lost no fewer than 12 directors, while between 2000 and 2005 it got through five managing directors.
Meanwhile the store itself, in the eyes of critics, degenerated into a “vulgar Egyptian theme park”.
Fayed finally got it right when, in March 2006, he poached Michael Ward, a retailer-turned-private equity executive, from Apax to fill the vacant post of Harrods managing director.
It was a fine and shrewd appointment.
During his first year in charge, Mr Ward increased annual profits at the business by 152% and, crucially, found a way of working with the owner.
Shortly after the Qatari takeover, in 2010, Mr Ward – who stayed with Harrods under its Qatari owners and propelled it to record annual sales and profits several times since – explained to the Sunday Times: “Once trust was established he was a very good person to work with. The problem, historically, was that nobody managed to cross that barrier.”
Interestingly, while Fayed sold both Harrods and Fulham, he never relinquished control of the Paris Ritz, the trophy asset he held on to longer than any other despite the fact that, for long periods of his ownership, it was heavily loss-making.
It will be interesting to see whether his heirs choose to cash in on this most valuable of properties after his death.
A man has been arrested by police investigating a “significant” wildfire that triggered a major incident in Northern Ireland.
More than 100 firefighters and 15 fire appliances were deployed on Saturday to Sandbank Road, Hilltown, to tackle the blaze which is believed to have been caused deliberately, fire chiefs said.
Northern Ireland Fire and Rescue Service (NIFRS) said the fire had a front of approximately two miles “including a large area of forestry close to property”.
It was extinguished at 2.53am on Sunday and the major incident status lifted, the NIFRS said.
“The cause of this fire is believed to have been deliberate,” chief fire and rescue officer Aidan Jennings said.
The Police Service of Northern Ireland said on Sunday that a 25-year-old man had been arrested “on suspicion of arson being reckless as to whether life would be endangered, and non-related driving offences”.
“He remains in custody at this time as enquiries continue into the circumstances surrounding the fire,” the force added.
The wildfire on Sandbank Road, Hilltown. Pic: Sky Watch NI
More than 100 firefighters were at the scene of the fire. Pic: Sky Watch NI
Various fires erupted across England this week amid uncharacteristically warm and dry conditions for the time of year.
On Saturday, helicopters were deployed to tackle Scotland’s fourth wildfire this week, with police saying a blaze “which started in the Newton Stewart area has spread northwards and is expected to reach the Loch Doon area of East Ayrshire around 12am on Sunday”.
Police Scotland added: “As a precautionary measure members of the public are asked to avoid the Loch Doon area and anyone who may be camping in the area is advised to leave.”
Moors Valley Country Park blackened by fires this week
Elsewhere in England, Devon and Cornwall Police said they were assisting the fire service with temporary road closures on the A30 in the Bolventor area as they tackle “a number of fires” on moorland.
In Dorset, Moors Valley Country Park was forced to close after multiple wildfires broke out there on Wednesday.
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Separate incidents were then reported at Upton Heath in Poole on Wednesday, and nearby Canford Heath in the early hours of Thursday.
Friday was officially the warmest day of the year so far – with temperatures in the south of England reaching 23C (73.4F) – the highest since 21 September last year, according to the Met Office.
The weather conditions triggered a “severe” wildfire rating for parts of the UK on Tuesday.
UK
Furious row after Labour MPs denied entry to Israel – as Lammy criticises ‘disgraceful’ Badenoch response
A furious political row has broken out after two Labour MPs were denied entry to Israel and deported after being accused of planning to “spread anti-Israel hatred”.
Yuan Yang and Abtisam Mohamed were rejected because they were suspected of plans to “document the activities of security forces and spread anti-Israel hatred”, according to a statement from the Israeli immigration ministry.
Ms Yang, who represents Earley and Woodley, and Ms Mohamed, the MP for Sheffield Central, both flew to the country from Luton on Saturday – and later said they were “astounded” by their treatment.
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The Israeli immigration ministry said the MPs were accompanied by two assistants on the trip and during questioning, they claimed they were visiting Israel “as part of an official parliamentary delegation”.
But Israeli officials said immigration officers found “no evidence to support the claim… they were travelling as part of an official delegation”. “No politicians or government officials were aware they were coming,” they added.
The Council for Arab-British Understanding (CAABU) contradicted Israeli officials, saying the women were part of a “parliamentary delegation” on a trip organised by them and Medical Aid for Palestinians (MAP).
Conservative leader Kemi Badenoch told Sunday Morning With Trevor Phillips she was “not surprised” the MPs were detained and that “every country should be able to control its borders, and that’s what Israel is doing, as far as I understand”.
She said she was “very concerned” about the “rhetoric” on the Middle East from Labour MPs and six independents, and claimed there is “a lot of repeating of misinformation, repeating of conspiracy theories” during Prime Minister’s Questions.
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Tory leader backs Israel over deported MPs
UK Foreign Secretary David Lammy criticised Ms Badenoch’s comments, writing in a post on X: “It’s disgraceful you are cheerleading another country for detaining and deporting two British MPs. Do you say the same about Tory MPs banned from China?.”
Ms Badenoch retorted, saying: “Unlike China, Israel is our ally and a democracy. A good Foreign Sec would be able to make that distinction.”
One of Ms Badenoch’s ministers Richard Fuller appeared to contradict her, however, telling Times Radio: “Any member of Parliament who goes on an official trip should be, I would think, welcomed in any country.”
Chair of the foreign affairs select committee Emily Thornberry MP described Israel’s treatment of the two women as an “insult to our country and to Parliament”.
In a joint statement, Ms Yang and Ms Mohamed said they were “astounded at the unprecedented step taken by the Israeli authorities”.
“It is vital that parliamentarians are able to witness, first-hand, the situation in the occupied Palestinian territory,” they said.
“We are two, out of scores of MPs, who have spoken out in Parliament in recent months on the Israel-Palestine conflict and the importance of complying with international humanitarian law. Parliamentarians should feel free to speak truthfully in the House of Commons, without fear of being targeted.”
They said they had travelled to “visit humanitarian aid projects and communities in the West Bank” with “UK charity partners who have over a decade of experience in taking parliamentary delegations”.
Israel’s UK embassy said the MPs were denied entry because they had “accused Israel of false claims, were actively involved in promoting sanctions against Israeli ministers, and supported campaigns aimed at boycotting the state of Israel”.
It said the women “chose not to exercise their right under Israeli law to petition the court to reconsider the decision”.
As a result, they were “offered hotel accommodation, which they declined” and their return flight was covered by the Israeli state.
“The visit was intended to provoke anti-Israel activities at a time when Israel is at war and under attack on seven fronts. Its purpose was to harm Israel and Israeli citizens and spread falsehoods about them,” the statement added.
“The state of Israel has both the authority and the duty to prevent the entry of individuals whose presence in the country is intended to cause harm to its citizens – just as such authority exists in the United Kingdom.”
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Earlier in a statement to Sky News, Mr Lammy said it was “unacceptable, counterproductive, and deeply concerning that two British MPs on a parliamentary delegation to Israel have been detained and refused entry by the Israeli authorities”.
“I have made clear to my counterparts in the Israeli government that this is no way to treat British parliamentarians, and we have been in contact with both MPs tonight to offer our support.
“The UK government’s focus remains securing a return to the ceasefire and negotiations to stop the bloodshed, free the hostages and end the conflict in Gaza.”
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Emily Thornberry says Israel has to ‘stop being so thin-skinned’ about criticism over its Gaza war.
In an interview with Sky News, Dame Emily Thornberry said her two colleagues are “highly intelligent, well informed” and “really well respected”.
“They speak on behalf of a lot of people,” said the Labour MP, warning Israel that instead of “alienating” and “humiliating” them it should “engage” with them.
She confirmed the women have landed back in the UK and that “they’ll be okay”. But she added: “I am so angry.”
Labour Friends of Israel said it was “wrong and counterproductive for Israel to refuse entry to British members of Parliament”.
“Over the years we’ve taken hundreds of MPs to Israel and Palestine; it’s vital parliamentarians are able to visit and understand the situation on the ground,” it said.
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