Letter from Sir Andrew Bowden MBE, MP
to the Parliamentary Commissioner for Standards
At our meeting I was concerned that I was unable
to explain why I wanted a meeting with Mr Al-Fayed and Mr Greer
without lawyers present.
I have now located some notes[51]
and a letter (see Annex) relating to the meeting and I enclose
the originals. As you will see, I wished to discuss with Mr Fayed
some very frank and sensitive questions about his background,
including financial information and his dispute with Mr Rowland.
In the circumstances, I felt that the discussion would be less
inhibited if legal advisers were not present.
If you wish to see me again to discuss this
matter, or anything else, please let me know.
(Sir Andrew Bowden MBE, MP)
13 February 1997
ANNEX
Letter from Mr Mohamed Al-Fayed to The
Rt Hon Paul Channon, MP Secretary of State for Trade and Industry
My brothers and I understand that Mr R W Rowland,
the Chief Executive of Lonrho plc, has resumed his vitriolic
correspondence with your Department, protesting Lonrho's ill treatment
in its attempts to gain control of House of Fraser. As always,
Mr Rowland ignores the fact that it was he who delivered the control
of Fraser to us by selling us Lonrho's 36.3 per cent of the equity.
He conveniently ignores too the fact that he was able to make
a conditional bid of his own for Fraser at any time after 7 March,
1985 but for his own reasons, perhaps inadequate resources, chose
not to do so.
Whilst we are confident that you will accord
to Mr Rowland's bile all the respect that it merits, we believe
that it is timely to update your Department as to where we stand
in our legal battle with Mr Rowland and as to other matters which
we feel warrant your interest. We apologise for the length of
this letter and its attachments but we are of the view that one
should not deal cursorily with matters of such gravity.
A. The Observer 1. We have responded to Mr
Rowland's campaign of un-paralleled ferocity by the issue of three
libel writs. This pressure has led The Observer's
own lawyers to concede:
(a) that The Observer has never
had sight of any power of attorney whereby the writer was given
authority over the funds of the Sultan of Brunei even though
The Observer purported to quote from such a power verbatim
on 28 July, 1985 (Appendix 1) and on other occasions;
(b) that The Observer is no longer
seeking to justify its central allegation that the Sultan is the
true owner of Fraser and that my brothers and I were merely his
agents. This concession was made in open court on 11 July, 1986
before Mr Justice Mann;
(c) that The Observer could not
justify its sensational, though anonymous stories of 12 January
and 18 May, 1986 implicating Mrs Margaret Thatcher, the Sultan,
Mark Thatcher and the writer in a ludicrous conspiracy (Appendices
2 and 3). The editor himself, Donald Trelford, eventually admitted
writing these and their lack of justification is set out in an
open letter of 4 July, 1986 (Appendix 4) from The Observer's
solicitors;
(d) that certain documents upon which The
Observer has sought to rely may well be forgeries. In this
respect, we attach an affidavit (Appendix 5) of our Legal Adviser,
Mr Royston Webb, the exhibits to which clearly demonstrate the
use of a forgery and were instrumental in forcing The Observer's
lawyers to admit that the Trelford articles could not be
justified.
2. In addition, internal Observer correspondence
indicates that certain of its own journalists considered the
Trelford story to be "journalistically unacceptable"
and one which could terminally damage the paper's "reputation
for journalistic integrity" (Appendix 6). Trelford himself
admits (Appendix 7) that his investigation "has been handled
mostly behind closed doors" and that he had the evidence
to support it - which his lawyers later admitted was not the
case.
3. To obtain these concessions at an interlocutory
stage represents substantial progress and we have now moved into
the discovery phase of the action where it is abundantly clear
that the Observer, at Mr Rowland's behest, will conduct
a speculative "fishing" trip in the hope of finding
something from us with which to plug its own alarming vacuum
of evidence. Its only specific - and much repeated - allegation
is that the Sultan provided the funds and we are disclosing personal
bank accounts proving that we already had the money well before
our relationship with the Sultan began. In the absence of further
specific allegations, we are not prepared to disclose more to
Mr. Rowland, labelled by a DTI inspector as the man "whose
wishes often father his memory".
4. Interestingly, Mr Rowland is now making less
of those "tapes", the subject of much of his correspondence
last year and the "transcript" of which was used by
him to plant an article in the little known New York publication,
Jewish Press, which in turn was used by Trelford as an
apparently independent source from which to cull his anti-semitism
quote in his article of 12 January. A copy of the retraction published
by Jewish Press is enclosed (Appendix 8), [52]
together with Mr Rowland's letter to Trelford of June, 1986 (Appendix
9) in which he names a Washington lawyer, Mr Steven Martindale,
acting on behalf of a Shri Chandra Swamiji Maharaj, as the man
who made the recording. Enclosed also are an affidavit from Mr
Martindale (Appendix 10) flatly denying the allegation and documents
from the guru (Appendix 11) contradicting his alleged involvement.
The man whose wishes father his memory seems to be wishing very
hard!
5. The only remaining "evidence" provided
by Mr Rowland concerning the Sultan is the so-called acknowledgment
and promissory note, made much of in The Observer article
of 3 November, 1985 (Appendix 12). Mr Rowland claims that
the guru gave these conveniently unsigned documents to him but
this was denied in front of Mr Webb and a partner of the Washington
law firm, Williams and Connolly, in New York on 20May, 1986.
In addition the Sultan has stated in writing (Appendix 13) that
he has no financial investment in any of our enterprises.
6. Six months silence in The Observer
campaign permits the inference to be naturally drawn that Mr
Rowland's continued abuse of his ownership of the paper to pursue
his shabby and misguided vendetta has encountered the resistance
of his own lawyers and independent directors - hence the escalation
of wild and irresponsible correspondence which is checked by
no one. It must be plain to anyone familiar with the facts that
the DTI and OFT were magnanimous indeed in extending to Mr Rowland
in the autumn of 1985 the courtesy of an investigation and that
the findings set out in the letter of your predecessor, Mr Leon
Brittan (Appendix 14), were very much to the point.
B. The 1976 DTI Report
The Hayman/Slimmings
report of 1976 led to certain Lonrho practices being dubbed the
"unpleasant and unacceptable face of capitalism" and
was notable in that it laid bare Mr Rowland's methods of doing
business, with an emphasis on corruption and personal enrichment
at his company's expense.
Having been prompted by the events of the
last two years to study the report in depth, it surprises us greatly
that criminal prosecutions were not brought. It may be noteworthy
that the investigating officer in the Fraud Squad, Chief Superintendent
Etheridge, should have subsequently joined Lonrho as Chief Security
Officer at a salary greatly in excess of that paid to the average
main board director. The writer is concerned that the report
disclosed clear prima facie breaches of
the criminal law and yet no action was taken.
C. The Amethyst Case
Consistent with
many of the events uncovered by Hayman and Slimmings is that set
out in two Sunday Times articles of June, 1986 and one of
1 February 1987 (Appendix 15) relating to suspicious amethyst
dealings.
Complaints were lodged last summer with the
City of London police but it is understood (Appendix 16) that
the Law Officers decided that the DPP should not initiate an
investigation. No reasons were given and it may well be a matter
of public interest to initiate a private prosecution in respect
of Mr Rowland's documented abuse of the criminal law.
In the amethyst case, it is a matter of fact
that the existence of two Lonrho subsidiaries in Liechtenstein,
Blorg and Contango, was never disclosed as demanded by Section
3 of the Companies Act of 1967. This illegal non-disclosure is
part of a complex pattern of concealment in the case and derivative
suit has now been filed on behalf of the minority shareholders
seeking an account in respect of the proceeds which run to millions
of dollars. A copy of the writ is enclosed (Appendix 17). At
some point Mr Rowland and his henchmen must brought to book for
this matter and those uncovered in 1976.
D. The 1984 DTI Report
A further point of
concern stems from the 1984 report of John Griffiths, QC, appointed
by the DTI to enquire into alleged concert parties in share dealings
in the House of Fraser. The report was prepared on an interim
basis and issued prior to the sale by Lonrho to my family of
Lonrho's 29.9 per cent holding in Fraser on 2 November 1984.
We believe that the time has now come for further enquiry to make
the report final.
Amongst those suspected of acting in concert
with Mr Rowland were Ashraf Marwan, Sir Hugh Fraser and Sir Jack
Hayward. The inspector could find no firm proof of a concert party
but - after the publication of the report and immediately after
the sale of Lonrho's shares - Lonrho brought the holdings of those
three individuals. One obvious interpretation is that they were
acting in concert with Mr Rowland and that there was an agreement
between them to the effect that if Lonrho sold its shares then
Lonrho would buy out the others immediately, thus protecting
them from the prospect of any loss consequent upon Lonrho quitting
the scene as a potential bidder for the whole of Fraser. The
finalisation of the Griffiths Report is now needed to clarify
these matters.
E. Arms Dealing
Contrary to the protestations
of Mr Rowland at the time of disclosure of his role in the US/Iran
arms deal, Lonrho has previously been involved in arms dealing
and one must question why Mr Rowland sought to mislead the press
in this way (Appendices 18[53]
and 19).
Apart from the notorious Red Baron affair acknowledged
by Mr Rowland's co-director, Robert Dunlop, the Lonrho subsidiary
Tradewinds has been named as the carrier in deals whereby ex-CIA
agent, Edwin P Wilson, shipped to Libya its weapons of terrorism.
Wilson is presently serving 52 years in a US prison for his enterprise
whilst, interestingly, a co-director in Tradewinds with Messrs
Rowland, du Cann and Dunlop, from April 1981 to May 1983, was
the head of Libyan "security", Ahmed el Gaddafadam,
a cousin of Colonel Gaddafi.
Until 1983, Lonrho's 40 per cent partner
in Tradewinds was Ashraf Marwan who, however, served only fleetingly
as a director and it is possible that he was acting merely as
a front for Libyan interests. It is something of a coincidence
that Wilson should have been arrested, Marwan sold his shareholding
and Gaddafadam resigned as a director almost at the same time.
A Sunday Times article of 1984 (Appendix
20) gave some background on the Marwan/Libya involvement and
it is interesting that Gaddafadam cited Marwan's office as his
address in the notification of his directorship to Companies
House.
The activities of Tradewinds in particular and
Lonrho's arms links in general merit the closest inspection and
Mr Rowland's attempts to deceive the press serve only to heighten
one's suspicions.
F. Mozambique
The twin spectres of Libya
and Ashraf Marwan loom large in Mr Rowland's recent business dealings
with Mozambique.
It is well known that Lonrho has substantial
commercial interests in Mozambique and that it was a staunch
supporter of Samora Machel's government. Indeed it was revealed
in Africa Analysis (Appendices 21 and 22) that Lonrho was financing
the provision of security services and military training by Defence
Systems Ltd. This was also dealt with at length by the Spectator
(Appendix 23). It has also become apparent that the rebel forces
in Mozambique, the MNR, enjoy the backing not only of the South
Africans but also the Israelis and that the government is facing
grave military difficulties (Appendix 24). Following the death
of Samora Machel, the Lonrho jet (HB - ITM, Gulfstream III) flew
to Maputo on 26 October, 1986 but Rowland was not on it. The
plane was being used by Ashraf Marwan of whom Rowland had said
on oath in the Griffiths Report (Appendix 25):
"I would not want to do business with Ashraf
Marwan . . . who is totally unreliable when it comes to business
. . . In terms of business Dr Ashraf Marwan is totally unreliable".
Thus a man considered unreliable flew in
the Lonrho jet at a cost of £2,500 an hour at a most sensitive
time in Mozambique's history. He was there for the swearing in
of the new President, Chissano, and then - on 2 November flew,
in the same jet, direct to Tripoli in Libya. We know that Rowland
has no need of any political assistance in black Africa because
his own abilities in that area are unrivalled. So why did Marwan
go to Maputo, at a cost to Lonrho of over £60,000, at such
a sensitive time? There is only one ready explanation. In
order to secure the economic prizes of Mozambique, Rowland needs
a strong Frelimo government and that government needs all the
military support it can get if it is to remain in office. Marwan's
role may well have been to assess what armaments were required
and then travel to Libya to arrange the financing with Gaddafi
or the Gaddafadams. Thus, the Mozambique government is supported,
Rowland gets his economic concessions, Marwan gets a large commission
on the arms and Gaddafi gets a new theatre of ferment in an area
where he has to date enjoyed little influence.
The closeness of the Lonrho/Libya link is further
underlined by the proposed oil deal covered in December's Business
magazine (Appendix 26).
G. The Guinness Affair
The Guinness/Distillers affair is likely to
remain a corporate cause celebre for months to come but one should
not lose sight of the fact that the Guinness bid for Distillers
would certainly have been referred to the Monopolies Commission
for thorough scrutiny if Guinness had not agreed to sell certain
of the Distillers' whisky brands to Lonrho. In essence, a £10
million purchase permitted a £2.6 billion deal to go through.
The Daily Mail of
4 December (Appendix 27) [54]
called for the DTI to probe the Guinness/Lonrho deal since it
was so riddled with inconsistency that it might be suspect. For
example, to quantify the domestic Scotch market at £35 million
per annum - which the Lonrho purchase price implied - is patently
ridiculous and the deal deserves the fullest scrutiny - most
particularly in the light of Guinness' own admissions as to the
conditions under which it induced its friends to influence share
prices.
SUMMARY
Having suffered at the hands of the unprincipled
and unscrupulous Mr Rowland for so long, we believe that it is
now time that his conduct be thoroughly investigated and exposed.
We shall use all the legitimate means at our disposal to ensure
that this man can no longer abuse his position of trust at the
head of a public company and we trust that your Department will
also exercise its far greater powers to the same end - both to
finalise such outstanding matters as the Griffiths enquiry and
to conduct a further thorough investigation into the affairs
of Lonrho under Section 432 of the Companies Act, 1985. Should
you require any further information, please do not hesitate to
let us know.
(Mohamed Al-Fayed)
2 February 1987
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