Allegations of financial impropriety by Mr Denis O’Brien were taken so seriously by the board of ESAT Digifone that they considered postponing the flotation of ESAT Telecom, the Moriarty Tribunal heard today.
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Mr Denis O’Brien
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Mr Michael Walsh told the tribunal that as a director of ESAT Digifone, he had "no reason to disbelieve" the claims by the company’s former CEO, Mr Barry Maloney.
Mr Maloney claimedMr O’Brien told him in 1996 he had paid £100,000 to an unnamed person that Mr Maloneyunderstood to be Mr Michael Lowry.
"It was a very serious issue, the board were not taking it lightly," Mr Walsh said.
He said a series of meetings of the board were held in October, 1997, just prior to ESAT Telecom’s IPO, to discuss the implications of the allegations on the deal.
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"We felt there were a number of serious issues facing ESAT Digifone", he said.
Mr Walsh was nominated to the board to represent Mr Dermot Desmond’s IIU company, a major shareholder in the firm.
He said Mr Desmond was so concerned by the risk posed to ESAT Digifone if any evidence emerged money was paid to the former Fine Gael minister, that he threatened to sue Mr O’Brien.
Mr Desmond also insisted a full disclosure of events surrounding the alleged payments would have to be made to the Moriarty tribunal.
Mr Walsh said Mr Desmond was angry the revelations had not come to light immediately after the conversation, but were only being heard now.
However, Mr Walsh said, the board became satisfied after Mr Maloney accepted no payment had been made following a meeting with himslef and Mr O'Brien.
Mr O'Brien, in conjunction with Mr Maloney, then drafted a formal letter stating no payment had been made.
"I felt Denis had evil thoughts but no money was paid", he said. He told the tribunal today he was then satisfied ESAT Digifone had no reason to be concerned.
But his suspicions were raised when Mr Maloney told him the next day an intermediary had become involved in the deal, Mr Walsh said.
"This made us even more alert to the potential danger to the company."
Mr Walshcontinues his evidence this afternoon.
