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1) BACKGROUND
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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