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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
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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.

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Chair candidates battle to check in at Premier Inn-owner Whitbread

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Chair candidates battle to check in at Premier Inn-owner Whitbread

Two chairs of FTSE-100 companies are vying to succeed Adam Crozier at the top of Whitbread, the London-listed group behind the Premier Inn hotel chain.

Sky News has learnt that Christine Hodgson, who chairs water company Severn Trent, and Andrew Martin, chair of the testing and inspection group Intertek, are the leading contenders for the Whitbread job.

Mr Crozier, who has chaired the leisure group since 2018, is expected to step down later this year.

The search, which has been taking place for several months, is expected to conclude in the coming weeks, according to one City source.

Ms Hodgson has some experience of the leisure industry, having served on the board of Ladbrokes Coral Group until 2017, while Mr Martin was a senior executive at the contract caterer Compass Group and finance chief at the travel agent First Choice Holidays.

Under Mr Crozier’s stewardship, Whitbread has been radically reshaped, selling its Costa Coffee subsidiary to The Coca-Cola Company in 2019 for nearly £4bn.

The company has also seen off an activist campaign spearheaded by Elliott Advisers, while Mr Crozier orchestrated the appointment of Dominic Paul, its chief executive, following Alison Brittain’s retirement.

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It said last year that it sees potential to grow the network from 86,000 UK bedrooms to 125,000 over the next decade or so.

Mr Crozier is one of Britain’s most seasoned boardroom figures, and now chairs BT Group and Kantar, the market research and data business backed by Bain Capital and WPP Group.

He previously ran the Football Association, ITV and – in between – Royal Mail Group.

On Friday, shares in Whitbread closed at £25.41, giving the company a market capitalisation of about £4.5bn.

Whitbread declined to comment this weekend.

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Bank chiefs to Reeves: Ditch ring-fencing to boost UK economy

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Bank chiefs to Reeves: Ditch ring-fencing to boost UK economy

The bosses of four of Britain’s biggest banks are secretly urging the chancellor to ditch the most significant regulatory change imposed after the 2008 financial crisis, warning her its continued imposition is inhibiting UK economic growth.

Sky News has obtained an explosive letter sent this week by the chief executives of HSBC Holdings, Lloyds Banking Group, NatWest Group and Santander UK in which they argue that bank ring-fencing “is not only a drag on banks’ ability to support business and the economy, but is now redundant”.

The CEOs’ letter represents an unprecedented intervention by most of the UK’s major lenders to abolish a reform which cost them billions of pounds to implement and which was designed to make the banking system safer by separating groups’ high street retail operations from their riskier wholesale and investment banking activities.

Their request to Rachel Reeves, the chancellor, to abandon ring-fencing 15 years after it was conceived will be seen as a direct challenge to the government to take drastic action to support the economy during a period when it is forcing economic regulators to scrap red tape.

It will, however, ignite controversy among those who believe that ditching the UK’s most radical post-crisis reform risks exacerbating the consequences of any future banking industry meltdown.

In their letter to the chancellor, the quartet of bank chiefs told Ms Reeves that: “With global economic headwinds, it is crucial that, in support of its Industrial Strategy, the government’s Financial Services Growth and Competitiveness Strategy removes unnecessary constraints on the ability of UK banks to support businesses across the economy and sends the clearest possible signal to investors in the UK of your commitment to reform.

“While we welcomed the recent technical adjustments to the ring-fencing regime, we believe it is now imperative to go further.

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“Removing the ring-fencing regime is, we believe, among the most significant steps the government could take to ensure the prudential framework maximises the banking sector’s ability to support UK businesses and promote economic growth.”

Work on the letter is said to have been led by HSBC, whose new chief executive, Georges Elhedery, is among the signatories.

His counterparts at Lloyds, Charlie Nunn; NatWest’s Paul Thwaite; and Mike Regnier, who runs Santander UK, also signed it.

While Mr Thwaite in particular has been public in questioning the continued need for ring-fencing, the letter – sent on Tuesday – is the first time that such a collective argument has been put so forcefully.

The only notable absentee from the signatories is CS Venkatakrishnan, the Barclays chief executive, although he has publicly said in the past that ring-fencing is not a major financial headache for his bank.

Other industry executives have expressed scepticism about that stance given that ring-fencing’s origination was largely viewed as being an attempt to solve the conundrum posed by Barclays’ vast investment banking operations.

The introduction of ring-fencing forced UK-based lenders with a deposit base of at least £25bn to segregate their retail and investment banking arms, supposedly making them easier to manage in the event that one part of the business faced insolvency.

Banks spent billions of pounds designing and setting up their ring-fenced entities, with separate boards of directors appointed to each division.

More recently, the Treasury has moved to increase the deposit threshold from £25bn to £35bn, amid pressure from a number of faster-growing banks.

Sam Woods, the current chief executive of the main banking regulator, the Prudential Regulation Authority, was involved in formulating proposals published by the Sir John Vickers-led Independent Commission on Banking in 2011.

Legislation to establish ring-fencing was passed in the Financial Services Reform (Banking) Act 2013, and the regime came into effect in 2019.

In addition to ring-fencing, banks were forced to substantially increase the amount and quality of capital they held as a risk buffer, while they were also instructed to create so-called ‘living wills’ in the event that they ran into financial trouble.

The chancellor has repeatedly spoken of the need to regulate for growth rather than risk – a phrase the four banks hope will now persuade her to abandon ring-fencing.

Britain is the only major economy to have adopted such an approach to regulating its banking industry – a fact which the four bank chiefs say is now undermining UK competitiveness.

“Ring-fencing imposes significant and often overlooked costs on businesses, including SMEs, by exposing them to banking constraints not experienced by their international competitors, making it harder for them to scale and compete,” the letter said.

“Lending decisions and pricing are distorted as the considerable liquidity trapped inside the ring-fence can only be used for limited purposes.

“Corporate customers whose financial needs become more complex as they grow larger, more sophisticated, or engage in international trade, are adversely affected given the limits on services ring-fenced banks can provide.

“Removing ring-fencing would eliminate these cliff-edge effects and allow firms to obtain the full suite of products and services from a single bank, reducing administrative costs”.

In recent months, doubts have resurfaced about the commitment of Spanish banking giant Santander to its UK operations amid complaints about the costs of regulation and supervision.

The UK’s fifth-largest high street lender held tentative conversations about a sale to either Barclays or NatWest, although they did not progress to a formal stage.

HSBC, meanwhile, is particularly restless about the impact of ring-fencing on its business, given its sprawling international footprint.

“There has been a material decline in UK wholesale banking since ring-fencing was introduced, to the detriment of British businesses and the perception of the UK as an internationally orientated economy with a global financial centre,” the letter said.

“The regime causes capital inefficiencies and traps liquidity, preventing it from being deployed efficiently across Group entities.”

The four bosses called on Ms Reeves to use this summer’s Mansion House dinner – the City’s annual set-piece event – to deliver “a clear statement of intent…to abolish ring-fencing during this Parliament”.

Doing so, they argued, would “demonstrate the government’s determination to do what it takes to promote growth and send the strongest possible signal to investors of your commitment to the City and to strengthen the UK’s position as a leading international financial centre”.

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Post Office to unveil £1.75bn banking deal with big British lenders

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Post Office to unveil £1.75bn banking deal with big British lenders

The Post Office will next week unveil a £1.75bn deal with dozens of banks which will allow their customers to continue using Britain’s biggest retail network.

Sky News has learnt the next Post Office banking framework will be launched next Wednesday, with an agreement that will deliver an additional £500m to the government-owned company.

Banking industry sources said on Friday the deal would be worth roughly £350m annually to the Post Office – an uplift from the existing £250m-a-year deal, which expires at the end of the year.

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The sources added that in return for the additional payments, the Post Office would make a range of commitments to improving the service it provides to banks’ customers who use its branches.

Banks which participate in the arrangements include Barclays, HSBC, Lloyds Banking Group, NatWest Group and Santander UK.

Under the Banking Framework Agreement, the 30 banks and mutuals’ customers can access the Post Office’s 11,500 branches for a range of services, including depositing and withdrawing cash.

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The service is particularly valuable to those who still rely on physical cash after a decade in which well over 6,000 bank branches have been closed across Britain.

In 2023, more than £10bn worth of cash was withdrawn over the counter and £29bn in cash was deposited over the counter, the Post Office said last year.

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A new, longer-term deal with the banks comes at a critical time for the Post Office, which is trying to secure government funding to bolster the pay of thousands of sub-postmasters.

Reliant on an annual government subsidy, the reputation of the network’s previous management team was left in tatters by the Horizon IT scandal and the wrongful conviction of hundreds of sub-postmasters.

A Post Office spokesperson declined to comment ahead of next week’s announcement.

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