I wanted to help a dear friend - Kern

The businessman at the centre of a corruption scandal that could bring down the Israeli government is a British fashion multi-millionaire who attended glittering parties with Princess Diana, Prince Charles, Princess Anne and Margaret Thatcher.

Cyril Kern, 72, is reported to have given £1 million to Ariel Sharon, Israel's Prime Minister and a close friend for 50 years, to finance his election campaign in violation of Israeli laws that ban foreign political donations.

Kern was born in London, where he spent most of his life and became chairman of Reldan, a successful fashion company. He was also chairman of the British Fashion Council in the mid-1980s. It was at gala fashion industry receptions that Kern met and was photographed with members of the Royal Family.

The photographs adorn the walls and desk of his study in Tamboerskloof, a Cape Town suburb where he lived quietly until the loan scandal broke.

On Friday Kern said he was part of a "fashion team" that accompanied Charles and Diana on a promotional tour soon after their marriage in 1981. A spokesman for Prince Charles said Saturday: "The Prince and Princess of Wales did a lot to promote British fashion and they mixed with prominent people in the industry. It is no surprise that they should have met Kern.''

Kern told how he was born to a Jewish family in London in 1930 and joined the Israeli army as a volunteer when he was 17.

He met Sharon, who was his first commanding officer, that year and they began a lifelong friendship. Many photographs of Kern with Sharon hang on the walls of his home and appear in albums, including one taken on the night Sharon became prime minister.

After military service, Kern returned to London and worked as a "skirtmaker" for his uncle Nadler's clothes company, called Reldan. When his uncle died, he became its successful chairman. He lived with his family in a large mock-Tudor house in Edgware.

Kern rejected the reports made against him over the loan to Sharon. He admitted making the loan but claimed that it was to help the Sharon family's troubled farm business. "I wanted to help a dear friend. The business was in trouble and I offered to help,'' he said.

The loan was used as collateral to obtain another loan to help Sharon repay "irregular" campaign funds. Kern added: "I am not a public face. I am a retired businessman. This is a personal matter. I am not interested in politics.''

The Telegraph Group Limited London 2003