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For a few weeks this summer, much in the world seemed right for Mohammed al Fayed. In July, at his villa in St.-Tropez, the Egyptian tycoon personally set in motion a romance between the Princess of Wales and his eldest son Dodi by plucking him off one family yacht to join his father on another one nearby, where Diana was tanning. As the romance blossomed into the possibility of an engagement, al Fayed feigned nonchalance. "Normal people fall in love," he told an interviewer. "That's it." But al Fayed surely exulted inside. His battles with the British establishment--over his 1985 purchase of Harrods, his unrewarded quest for citizenship, his hand in bringing down Tory ministers--had left him embittered. In Diana he picked up the jewel both prized and tossed aside by the English elite, a diamond with an edge that could cut. Snaring her, and perhaps even installing her in the former residence of the Duke and Duchess of Windsor (which al Fayed holds), would simultaneously concoct an alternative monarchy and remind the real one of a time when it had faltered.

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But al Fayed's world collapsed that Sunday morning in Paris, when he lost the son he loved and the princess he sought, and, too, the chance for acceptance from the country he adopted. From the start of the fated relationship, the force that pulled Diana toward the Fayeds was powerful: beyond sharing their sense of rejection, the princess undoubtedly craved the cocoon made possible by Dodi's family planes and mini-palaces, as well as the glamour of his Ritzy life. And after years in a family repelled by emotion, here was a family driven by it, whether in its public vendettas or in its private Mediterranean moments. To embrace all this, Diana, having left one dynasty that had used her, was ready to enter another. The Fayeds and she would find redemption together.

The union of Diana and Dodi would have culminated three decades of exhaustive and expensive attempts by the sixtyish Mohammed al Fayed to prove his British bona fides by collecting some of the nation's trophies. In addition to Harrods, he owns the famed humor magazine Punch, the Fulham Football Club and Balnagow castle in Scotland; his millions have sponsored the annual Royal Windsor Horse Show, where he has shared the royal box with the Queen. Al Fayed's younger brother Ali owns Turnbull & Asser, the prestigious tailor used by Prince Charles and his sons William and Harry. And al Fayed has long courted Diana and her parents; he put her stepmother Raine on the board of Harrods. Diana's father Earl Spencer, while dying, reportedly told al Fayed to "keep an eye" on the family.

Despite these ingratiating efforts, and his considerable commitments to various charities, acceptance within the British elite has eluded al Fayed. In France his restoration of two fabled Paris properties, the Ritz Hotel and the Bois de Boulogne villa of the Duke and Duchess of Windsor, earned him La Legion d'Honneur. But in Britain al Fayed could recite--and often did--a list of the many slights directed at him by the Establishment. After he poured $50 million into restoring the Windsor villa, he grumbled to the New York Times, "Not one single official said, 'Mohammed al Fayed, thank you. We are grateful.' Not one single letter."

From the start, al Fayed has portrayed himself as the victim of English arrogance, xenophobia and racism. Elites, he contends, resent him for owning Harrods. "It sticks in their throats," he told the Times. But the Fayeds have also inflicted much damage on themselves, starting with their unsuccessful attempts to rewrite their history. In 1985 the largely unknown Fayed brothers paid $689 million in cash for the House of Fraser retail chain (whose flagship was Harrods). Two years later, the Department of Trade and Industry--at the instigation of al Fayed's chief rival for control of Harrods--began investigating the family. Its report, published in 1990, concluded that the brothers did not hail, as they had claimed, from "an old Egyptian family" with a 100-year history of landownership and shipbuilding. "The image created...of their wealthy Egyptian ancestry was completely bogus," the report said. The government further concluded that the money al Fayed used to purchase Harrods could not have come from an inherited fortune, as he claimed, but was probably put up for al Fayed by his associate, the Sultan of Brunei, the world's wealthiest man.

Al Fayed was not accused of breaking any law, and he and the Sultan denied the charges. Al Fayed bitterly attacked the report as a smear. "They could not accept that an Egyptian could own Harrods, so they threw mud at me," he once said. But acquaintances of his in Alexandria also describe the Fayeds as a modest family: al Fayed's father was a language teacher, and al Fayed grew up on the rougher side of town. He started as a small-time trader there, selling Singer sewing machines and Coca-Cola. In the early 1950s the future Saudi billionaire Adnan Khashoggi offered al Fayed a share in a Khashoggi business that exported Egyptian-made furniture to Saudi Arabia. The company took off, and not long after, al Fayed married Khashoggi's sister Samira, who gave birth to Dodi in 1955. He divorced her after two years and went into the construction business in the United Arab Emirates. After befriending Dubai's ruler, al Fayed won big development contracts for British firms prowling the Persian Gulf. "Of course," says Khashoggi, "there were fees and commissions." This brokering was the foundation of the Fayed family fortune.

But even as he grew richer, al Fayed could not achieve his most cherished goal: to become a British citizen. The Fayed brothers' applications for citizenship stalled in the early '90s following the release of the report. It did not matter that they had paid millions of pounds in taxes annually, or that all four of al Fayed's children by his second wife are British. So al Fayed struck back in 1994 and revealed to the Guardian that for more than two years he had supplied Tory Members of Parliament with cash and free stays at the Ritz Hotel in exchange for political favors. Only afterward did the government officially turn down the brothers' citizenship request, without explanation--a decision al Fayed is appealing. The scandal, meanwhile, brought down two M.P.s and fueled a public outcry that contributed to the Conservatives' defeat in last spring's general election. Al Fayed seized the high ground, declaring he was "sick and tired of the hypocrisy that goes on at the highest level of government." But he failed to see that his revelations had brought to light his own culpability as a briber and that he would draw further resentment from Britain's power circles.

Al Fayed's public persona, all bluster, defiance and eccentricity, has done little to burnish his image. He is reportedly obsessive about personal security, employing a large number of bodyguards. He is litigious, and his dismissal of scores of Harrods' employees also invited litigation against him. And despite the riches he flaunts--a fleet of 64 Rolls-Royces, properties on London's Park Lane, a $32 million yacht--his record as an entrepreneur is very mixed. Last year the board of the weekly Observer rebuffed al Fayed's attempts to buy the paper, saying it was not for sale. In 1995 Rupert Murdoch shut down his Today newspaper rather than sell it to al Fayed. Bids to purchase the London News Radio station and the Daily Express have also failed. At Harrods profits rose 6% last year, but the company's debts increased to a staggering $264.3 million for the year ending January 1996. And financial sources told TIME that at least one international investment bank considered underwriting a public offering of Harrods' stock but harbored doubts because of continuing questions about al Fayed's reputation.

For his part, Emad ("Dodi") Fayed did not share his father's relentless pursuit of British approbation. From an early age he had a flair for the cosmopolitan, moving comfortably among Egyptian, French, Greek, American and British friends. He was educated at the St. Mark's school in Egypt, the Le Rosey school in Switzerland and the Royal Military Academy at Sandhurst. Childhood friends remember him as pleasant and well bred, and touched by loneliness, owing in part to his parents' divorce. Says Zizette Kishk, a family friend from Alexandria: "He was a very shy and quiet boy who had somewhat of a sad air about him."

Dodi's adolescence was spent shuttling among homes in Alexandria, Dubai and France. At 15 he was reportedly given his own Mayfair apartment, Rolls-Royce and chauffeur. He is said to have abandoned a fledgling career in the United Arab Emirates air force in favor of one in show business, establishing a London film-production company in the late 1970s. "He was financed by his father," Khashoggi says. With the elder Fayed's help, Dodi supplied $3 million of the $6.5 million total budget for the 1981 movie Chariots of Fire. In subsequent years he announced dozens of projects that he later dropped, and most of his investments were modest. "Dodi didn't work a day in his life," says an industry insider. "This is a guy who really enjoyed life."

He developed a reputation as a networking playboy who didn't always pay his bills. His father provided him with a reported monthly allowance of $100,000, but he allegedly owed hundreds of thousands of dollars to landlords in L.A. and New York City. Some of these accusations turned out to be ill founded, but at least one was still haunting him when he died. Kelly Fisher, the model who told tabloids in July that Dodi had pledged to marry her even as he squired Diana, accused him of writing checks to her that bounced. Yet along with these complaints, Dodi had plenty of associates willing to testify to his charm and affability. Khashoggi described his sister's son as "very quiet about life...a nice polite man, very courteous." Says a close friend: "He was with this one and that one, but he was very nice with them... Even when the story ends, he was very nice, acting like a gentleman."

Although they seemed to come from different worlds, Diana and Dodi were shaped by many of the same traumas--divorced parents, an unhappy first marriage and the death of a parent (Diana's father, Dodi's mother). The couple first met in 1986, at a polo match, but this summer, with the elder Fayed's prodding, the pair developed an intimate bond. "He was tres gentil, especially as Princess Diana would have seen him," says Dodi's friend. "All her life she was meeting very cold people. He was a big change for her." Al Fayed spokesman Michael Cole recalled speaking to Dodi in August, after news of the romance had broken. "Michael," Dodi said, "I will never, ever, have another girlfriend."

By the night of their death, the couple had decided to marry, according to some friends and relatives. Early in the summer, Mohammed al Fayed cleared out the Windsor villa in France and put 40,000 items on the auction block at Sotheby's. His family needed the extra space, al Fayed said, but some royal watchers breathlessly speculated that he was preparing a retreat for his son and the Princess of Wales. Few things would have proved more noisome to the royals than Diana, with an Egyptian husband and father-in-law, spending time in the former residence of another exile from royalty.

After the tragedy, al Fayed provided refreshments from Harrods to Britons waiting to sign Diana's condolence books. He chose not to return Dodi's body to Egypt, instead burying it at Brooklands Cemetery in Woking, an act that marked both his grief and his unrealized dreams of British belonging. There will be sympathy for him, but anger too from those who might blame the family for placing the princess in such mortal peril. Without prompting last Friday, Cole said al Fayed had "only wanted [Diana and Dodi] to be happy and to get to know each other. The Fayed family wanted nothing from the princess." The surprise was that those words needed to be said at all.


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