Monday 17 May 2010

Buying a shop, the original public-private battle for Harrods

Photograph: Stefan Rousseau/PA

With all the drama of a 'who-done-it', the saga of Lonrho (Tiny Rowland) and Mohamed Al Fayeds' fight for control of Harrods, involved government intervention, a DTI enquiry, a threatened injunction, two libel actions, and two rulings by the Monopolies and Mergers Commission: 'it was against the public interest for Lonrho to own Harrods since it also owned Brentford Nylons and might therefore discriminate against other suppliers of bed linen'
The story goes back to 1981, when the Monopolies and Mergers Commission made two rulings affecting Lonrho, the international conglomerate led by Tiny Rowland: one approved the company's purchase of the Observer; the other prevented it bidding for House of Fraser, owner of Harrods, which Rowland had been pursuing since 1977.
[For more details on 'warehousing' the Harrods shares, the implementation of one of the City's greatest 'stings' and subsequent use of several firms of accountants and solicitors, private detectives and freelance journalists in an investigative operation, said to cost many millions of pounds, together with illicit bugging devices and some of the money going in bribes to officials to unearth incriminating documents in Egypt, Haiti, Dubai, Brunei, France and Switzerland, see the original article]

The Department of Trade and Industry then launched an official Inquiry, but declined to publish the result. Rowland obtained a copy and The Observer produced a special midweek free edition of the newspaper to circumvent an anticipated injunction, expected later that day…

Insight: ..makes todays local tussles by the multiples with the planning authorities seem mild by comparison…

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