Harrods boss apologises and says Mohamed al Fayed ‘presided over toxic culture of secrecy’ and ‘sexual misconduct’
The managing director of Harrods has accused his former boss Mohamed al Fayed of presiding over “a toxic culture of secrecy, intimidation, fear of repercussion and sexual misconduct”.
Five women who used to work at the luxury department store have alleged they were raped by Fayed, who died last year at the age of 94, with several other former employees alleging sexual misconduct.
In a written statement, Michael Ward, who worked for the Egyptian billionaire at Harrods for four years, has denied having been previously aware of the businessman’s “criminality and abuse”.
He said Fayed’s ownership between 1985 and 2010 represents a “shameful period in the business’s history”.
Mr Ward apologised and said Harrods had “failed our colleagues”.
His statement reads: “As managing director of Harrods, I wanted to convey my personal horror at the revelations that have emerged over the past week.
“We have all seen the survivors bravely speak about the terrible abuse they suffered at the hands of Harrods former owner Mohamed Fayed.
“As we have already stated, we failed our colleagues and for that we are deeply sorry.
“As someone who has worked at Harrods since 2006, and therefore worked for Fayed until the change of ownership in 2010, I feel it is important to make it clear that I was not aware of his criminality and abuse.
“While it is true that rumours of his behaviour circulated in the public domain, no charges or allegations were ever put to me by the Police, the CPS, internal channels or others. Had they been, I would of course have acted immediately.”
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Harrods managing director Michael Ward. Pic: PA
Mr Ward also said an independent review was under way into issues arising from the allegations and that he had “provided all the information I have to ensure my own conduct can be reviewed alongside that of my colleagues”.
“I am not part of the committee conducting this review and will in no way influence its operation or recommendations… I have also stepped back from my charity trustee positions while this review is taking place,” he said.
Mr Ward added that Fayed had ran his business as his “own personal fiefdom”.
He continued: “It is now clear that he presided over a toxic culture of secrecy, intimidation, fear of repercussion and sexual misconduct.
“The picture that is now emerging suggests that he did this wherever he operated.”
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Fayed survivor speaks out: ‘It smashes his legacy’
Mr Ward insisted that the Harrods of today is “unrecognisable” compared to how it was under Fayed’s leadership.
He added that the business has established a settlement process which has been “designed in consultation with independent, external experts in personal injury litigation”.
“We encourage former colleagues to contact us using this process so that we can provide the support, and recourse, they need”, Mr Ward said.
Sources within Harrods have said the business has accepted vicarious liability, a rule of law that imposes strict liability on employers for the wrongdoings of their employees, for the conduct of Fayed for the purpose of settling claims of alleged victims brought to its attention since 2023.
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‘Mohamed al Fayed brainwashed me’
Some women have claimed they were subjected to “intrusive and wholly unnecessary” gynaecological tests to work for Fayed and have alleged the purpose of the tests was for checking for sexually transmitted infections.
Alleged victims are set to lodge a complaint against Dr Ann Coxon, claiming she has “questions to answer” over the examinations.
Dr Coxon declined to comment on the matter.
A General Medical Council spokeswoman said: “If we identify any potential fitness to practise concerns about individual doctors, we will thoroughly examine all relevant information and take action as appropriate.”
What has Fayed been accused of?
Dean Armstrong KC, a lawyer representing some of Fayed’s 37 alleged victims, has said the case against the businessman “combines some of the most horrific elements” of those including Jimmy Savile, Jeffrey Epstein and Harvey Weinstein.
The allegations have surfaced after an investigation by the BBC.
A former employee of Harrods has told Sky News “demonic” Fayed would “cherry pick” women from the shop floor and once they were called to his office they “couldn’t say no”.
After taking over Harrods in 1985, Fayed expanded his business interests to include the Paris Ritz and Fulham Football Club.
Lawyers say they are aware of allegations made by employees at other businesses owned by Fayed and are representing women who worked at the Paris Ritz.
There have not been any allegations against Fayed in relation to his ownership of Fulham FC between 1997 and 2013.
The business secretary will next week hold talks with dozens of private sector bosses as the government contends with a significant corporate backlash to Labour’s first fiscal event in nearly 15 years.
Sky News has learnt that executives have been invited to join a conference call on Monday with Jonathan Reynolds, in what will represent his first meaningful engagement with employers since Wednesday’s budget statement.
Rachel Reeves, the chancellor, unsettled financial markets with plans for billions of pounds in extra borrowing, and unnerved business leaders by saying she would raise an additional £25bn annually by hiking their national insurance contributions.
An increase in employer NICs had been trailed by officials in advance of the budget, but the lowering of the threshold to just £5,000 has triggered forecasts of a wave of redundancies and even insolvencies across labour-intensive industries.
Sectors such as retail and hospitality, which employ substantial numbers of part-time workers, have been particularly vocal in their condemnation of the move.
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On Friday, the Financial Times published comments made by the chief executive of Barclays in which he defended Ms Reeves.
“I think they’ve done an admirable job of balancing spending, borrowing and taxation in order to drive the fundamental objective of growth,” CS Venkatakrishnan said.
His was a rare voice among prominent business figures in backing the chancellor, however, with many questioning whether the government had a meaningful plan to grow the economy.
Mr Reynolds held a similar call with business leaders within days of general election victory, and over 100 bosses are understood to have been invited to Monday’s discussion.
A spokesman for the Department for Business and Trade declined to comment ahead of Monday’s call.
First things first: don’t panic.
What you need to know is this. The budget has not gone down well in financial markets. Indeed, it’s gone down about as badly as any budget in recent years, save for Liz Truss’s mini-budget.
The pound is weaker. Government bond yields (essentially, the interest rate the exchequer pays on its debt) have gone up.
That’s precisely the opposite market reaction to the one chancellors like to see after they commend their fiscal statements to the house.
In hindsight, perhaps we shouldn’t be surprised.
After all, the new government just committed itself to considerably more borrowing than its predecessors – about £140bn more borrowing in the coming years. And that money has to be borrowed from someone – namely, financial markets.
But those financial markets are now reassessing how keen they are to lend to the UK.
The upshot is that the pound has fallen quite sharply (the biggest two-day fall in trade-weighted sterling in 18 months) and gilt yields – the interest rate paid by the government – have risen quite sharply.
This was all beginning to crystallise shortly after the budget speech, with yields beginning to rise and the pound beginning to weaken, the moment investors and economists got their hands on the budget documentation.
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Chancellor challenged over gilt yield spike
But the falls in the pound and the rises in the bond yields accelerated today.
This is not, to be absolutely clear, the kind of response any chancellor wants to see after a budget – let alone their first budget in office.
Indeed, I can’t remember another budget which saw as hostile a market response as this one in many years – save for one.
That exception is, of course, the Liz Truss/Kwasi Kwarteng mini-budget of 2022. And here is where you’ll find the silver lining for Keir Starmer and Rachel Reeves.
The rises in gilt yields and falls in sterling in recent hours and days are still far shy of what took place in the run up and aftermath of the mini-budget. This does not yet feel like a crisis moment for UK markets.
But nor is it anything like good news for the government. In fact, it’s pretty awful. Because higher borrowing rates for UK debt mean it (well, us) will end up paying considerably more to service our debt in the coming years.
Rachel Reeves leaving 11 Downing Street before the budget. Pic: PA
And that debt is about to balloon dramatically because of the plans laid down by the chancellor this week.
And this is where things get particularly sticky for Ms Reeves.
In that budget documentation, the Office for Budget Responsibility said the chancellor could afford to see those gilt yields rise by about 1.3 percentage points, but then when they exceeded this level, the so-called “headroom” she had against her fiscal rules would evaporate.
Read more:
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Hefty tax and spending plans a huge gamble – analysis
In other words, she’d break those rules – which, recall, are considerably less strict than the ones she inherited from Jeremy Hunt.
Which raises the question: where are those gilt yields right now? How close are they to the danger zone where the chancellor ends up breaking her rules?
Short answer: worryingly close. Because, right now, the yield on five-year government debt (which is the maturity the OBR focuses on most) is more than halfway towards that danger zone – only 56 basis points away from hitting the point where debt interest costs eat up any leeway the chancellor has to avoid breaking her rules.
Now, we are not in crisis territory yet. Nor can every move in currencies and bonds be attributed to this budget.
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Markets are volatile right now. There’s lots going on: a US election next week and a Bank of England decision on interest rates next week.
The chancellor could get lucky. Gilt yields could settle in the coming days. But, right now, the UK, with its high level of public and private debt, with its new government which has just pledged to borrow many billions more in the coming years, is being closely scrutinised by the “bond vigilantes”.
A Halloween nightmare for any chancellor.
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