Select Committee on Standards and Privileges First Report



  108. The take-over in 1984 of House of Fraser by the Al Fayed brothers (Mohamed and Ali) produced an immediate hostile response from Lonrho, the company whose own ambition to acquire the store group they had frustrated, and more particularly from its chief executive Mr Tiny Rowland. He launched a well-funded and vitriolic campaign of opposition to the decision by the Secretary of State for Trade and Industry to allow the take-over to proceed. The purpose of the campaign, which exploited to the full Lonrho's media interests such as The Observer, was to question the validity of the decision to approve the Al Fayeds' acquisition of House of Fraser and to seek to have the take-over reversed, or, at the very least, to have some form of official inquiry established into the circumstances surrounding it.

  109. As Lonrho's campaign increased in intensity, it became clear to Mohamed Al Fayed that he needed to improve the effectiveness with which his own case was being presented to Ministers and to Parliament. House of Fraser already employed Sir Peter Hordern as a Parliamentary consultant at an annual fee of £25,000, but this post consisted mainly of providing advisory and representational services. Sir Peter himself, as he explained in oral evidence to the inquiry, did not regard it as proper for someone in his position to engage in Parliamentary activity on behalf of a sponsoring company.

  110. In October 1985, Mr Al Fayed, against the advice of Sir Peter Hordern, invited Mr Ian Greer to discuss the possibility of his lobbying company, Ian Greer Associates, acting on behalf of House of Fraser. Mr Greer's name had been recommended to Mr Al Fayed by Lord King, the then chairman of British Airways, who had first-hand experience of IGA's direct methods and extensive contacts with the Conservative party, both at Ministerial and backbench committee level.

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Prepared 8 July 1997