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Fight Over Harrods’ Ownership Flares Again

March 31, 1989

LONDON (AP) _ The bitter battle over ownership of the famous Harrods department store broke out anew Thursday when Lonrho PLC published a special edition of its newspaper The Observer, detailing what it said was a government report on an investigation into the matter.

The government moved quickly to block the special edition, which was devoted entirely to the long-running dispute between Lonrho and the Egyptian Fayed brothers. It obtained a high court order against its distribution at midday Thursday.

Thursday evening, Trade and Industry Secretary Lord Young asked Lonrho for an affidavit giving the exact circumstances in which the report came into the company’s hands.

Paul Spicer, a Lonrho director, said the British conglomerate probably would contest the injunction, claiming that it was in the public interest to publish the report, which the government so far has withheld.

Mohamed Fayed, who heads the retail chain House of Fraser PLC, Harrods’ owner, told British Broadcasting Corp. television, ″However much Tiny Rowland (Lonrho’s managing director) abuses his ownership of The Observer, he will never own Harrods.″

Donald Trelford, editor of the weekly Observer, denied that the newspaper was being used by its proprietor.

The Fayed brothers purchased House of Fraser in 1985 for $1.03 billion after Lonrho’s repeated attempts to buy it were thwarted by the Monopolies and Mergers Commission.

Since then, Lonrho has waged a campaign against the Fayeds to have the takeover reversed.

A Department of Trade and Industry inquiry into the Fayeds’ ownership of House of Fraser began in April 1987 but the results have not been published. The trade department says it has withheld its report at the request of the Serious Fraud Office, which is investigating the affair.

Lonrho allegations which the Fayeds deny.

The Observer, normally published on a Sunday, was due to be issued at noon Thursday and included what it claimed were long extracts from the Department of Trade and Industry report on the matter.

The Observer printed 250,000 copies, but 10 minutes before the 16-page paper was due to hit the streets, the trade department was granted an injunction by High Court Justice Tudor Evans against Lonrho and The Observer.

The Department of Trade and Industry called American news organizations, including The Associated Press, saying the injunction applied to them.

Lonrho Chairman Sir Edward du Cann told shareholders at their annual meeting in London Thursday: ″I cannot understand ... why the Department of Trade and Industry is continuing to try and hush this up.″

Trelford, The Observer’s editor, defended the decision to publish the special edition.

″It was my idea,″ Trelford told BBC television, adding that the government report was a major scoop which couldn’t wait until the regular Sunday publication of the newspaper.

The injunction did not prevent the special edition from getting out. Lonrho distributed copies of it to its shareholders at their meeting before the injunction was granted and afterward some newsagents still were selling it.

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