Moriarty Tribunal: Mr Denis O'Brien discussed placing his holding company in examinership three days before it was announced that Esat Digifone had won the State's second mobile-phone licence competition.
The businessman's Communicorp Group was in serious financial difficulties on Tuesday, October 23rd, 1995, but when it was announced on Friday afternoon, October 25th, 1995, that Esat Digifone had won the licence competition, Mr O'Brien was "inundated" with telephone calls from bankers wishing to give him money. Communicorp owned Esat Telecom, which in turn owned 40 per cent of Digifone.
Mr Owen O'Connell, managing partner with William Fry solicitors and solicitor to Communicorp, told the Moriarty tribunal yesterday about the sudden change in Mr O'Brien's fortunes.
He was giving evidence to Mr John Coughlan SC, for the tribunal, who asked whether he or Mr O'Brien had been aware in advance of October 25th, 1995, that the winner of the competition was to be announced. Mr O'Connell said he did not recall advance talk of the decision being announced.
He said he was present with Mr O'Brien on Tuesday, October 23rd, at a meeting where Communicorp's financial difficulties were discussed. "I even remember a discussion about whether examinership might be proposed and who the examiner might be."
Mr O'Connell said that when, on the Friday, it was announced that Digifone was the winner, Mr O'Brien was "inundated with calls from bankers offering money, and the gathering storm dissipated." He said it seemed therefore that Mr O'Brien had not known on the Tuesday that the announcement was to be made on the Friday. "If he had done, we would hardly have been having the meeting we did have." He said the discussion about the possibility of examinership was quite a preliminary one, as "things had not come to that pass".
Mr O'Connell said it was his view that in the period between the Digifone bid being submitted in August 1995, and Mr Dermot Desmond's IIU Ltd becoming involved in late September, Mr O'Brien's Norwegian partners, Telenor, may have been hoping to use Communicorp's financial weakness to their own advantage.
He said Telenor may have been considering demanding that Communicorp produce a commitment guaranteeing its financial obligations to Digifone. The establishment of the Digifone network was going to be very expensive and Communicorp did not have the funds to pay its part. Telenor had concerns about this and may also have thought it could get majority control over Digifone by pressing the point, Mr O'Connell said.
He said it was for this reason, in his view, that Communicorp had to get a commitment. It got this commitment from Mr Desmond's IIU Ltd.
He agreed with Mr Coughlan that documents indicated that Mr O'Brien tried to gain control of Digifone by having IIU agree to place some of the Digifone shares it held with Mr O'Brien's Esat Telecom. IIU agreed with Mr O'Brien's proposal, subject to the agreement of Telenor. Mr Coughlan said this may have been only to "jolly along" Mr O'Brien, as it was unlikely that Telenor would ever agree.
Mr O'Connell is to continue his evidence today.
