Government calls for inquiry into Harrods takeover

A thorough inquiry into how Harrods - the world-famous Knightsbridge department store - came under Egyptian ownership two years ago has been ordered by the Thatcher government. The probe into the $1 billion takeover follows insistent pressure by Roland (``Tiny'') Rowland, chief executive of the giant international trading conglomerate Lonrho, whose relentless attempts to acquire Harrods were finally frustrated when the Al-Fayed family of Egypt were granted permission to take control in 1985.

Mr. Rowland is a tall, dynamic business tycoon who, as well as heading Lonrho, owns the Observer Sunday newspaper. In the past two years he has bombarded the Department of Trade with letters demanding an inquiry into the Harrods takeover. When it was announced that Trade Secretary Paul Channon had agreed to an inquiry, a Lonrho director said the company was ``delighted.''

A spokesman of the Al-Fayed family said: ``Naturally we do not welcome the inconvenience of an inquiry, but we do welcome it as an opportunity to clear this matter up once and for all.''

The Egyptian takeover of Harrods was a cause c'el`ebre when it occurred. Rowland had been trying since the late 1970s to acquire the House of Fraser, the Harrods parent company, but was consistently frustrated. When the three Al-Fayed brothers put in a bid, they were regarded as a mysterious group, and at the time Rowland made much of the fact that little was known about them.

Rowland has always claimed that the Al-Fayeds launched their bid using money loaned to them by the Sultan of Brunei. This claim has never been substantiated. It is widely known, however, that the Al-Fayeds, who shun publicity, own the Ritz hotel in Paris. One of their spokesmen said at the time of the Harrods purchase: ``We are collectors of centers of excellence.''

Harrods certainly has a reputation for quality, and for the range of goods it offers. It is said that at Harrods one can buy anything from a pin to a pet python.

It appears that for Rowland, the campaign to force an inquiry into the Harrods takeover has been something of an obsession. Close observers of the London financial scene say he is convinced that his bid for Harrods was unfairly handled.

One of Rowland's aims now is apparently to ensure that the takeover inquiry delves into the Al-Fayeds' family history. Researchers have suggested that the family is not as wealthy as it claims, and that the father of the three brothers was a schoolteacher in Alexandria.

Financial observers are suggesting that the inquiry Rowland has now secured will put his own business dealings in connection with Harrods under the spotlight. Rowland apparently believes that the government ordered an inquiry after the Department of Trade came across new information about the Harrods takeover. The inquiry itself will probably take some months.

Meanwhile, Harrods shoppers are unlikely to be diverted by the hullabaloo. As Easter approached, the store put on a huge seasonal display, including chocolate Easter eggs and pink bunnies of all sizes. Anyone looking for obvious evidence of Egyptian ownership of a quintessentially English institution, or of the controversy that again swirls around the store, would have looked in vain. -30-{et

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