Lowry resignation stopped work on house

Builders working on a house in Blackrock, Co Dublin, belonging to Mr Michael Lowry stopped renovation work after Mr Lowry resigned from government in late 1996.

Mr Eddie Holly, a director of Cedar Building Co Ltd, said he and his late brother, Mr Michael Holly, became apprehensive that Mr Lowry might not want the work completed.

Mr Michael Holly tried to get in contact with Mr Lowry but it took some time, Mr Eddie Holly said. It was eventually agreed Mr Lowry would sell the house back to Cedar Building Co Ltd, at a price which would ensure Mr Lowry was not out of pocket as a result of buying the house.

Mr Holly told Ms Jacqueline O'Brien, for the tribunal, that his brother had spotted the house for sale in 1996 and decided to buy it, but told Mr Lowry that if he wanted it he would sell it on to him for the same price, £200,000. That is what happened.

It was agreed with Mr Lowry that Cedar Building Co Ltd would carry out renovations for £90,000. This work was advanced when Mr Lowry resigned from government. A note sent to Mr Lowry on December 4th, 1996, said work worth £32,000 had been carried out on the house.

Mr Lowry sold the house to Cedar Building Co Ltd for £238,000 in January 1997. The company subsequently spent £166,000 completing the renovation and conducting finishing work, before letting the property. Mr Holly said he had never been told funds were available from the late Mr David Austin for the refurbishment of the house for Mr Lowry.

Mr Owen O'Connell, managing partner with William Fry, Solicitors, told Mr John Coughlan SC, for the tribunal, that a 1997 inquiry into payments from accounts associated with Mr Denis O'Brien in Woodchester Bank, did not include a transfer of £407,000 from that bank to an account in the name of Mr Aidan Phelan.

Mr O'Connell was solicitor to Esat Telecom in 1997 when the company was preparing for an initial public offering (IPO) in the US and, in that context, investigated a comment made a year earlier by Mr Denis O'Brien concerning a payment to Mr Lowry. Mr O'Brien had said the comment was made in jest and no payment was made. Mr O'Connell said that as well as being a solicitor to Esat Telecom he had "a small number of shares" in the company and options.

Mr O'Connell agreed with Mr Coughlan that he did not know of the £407,000 transfer to Mr Phelan's account or of the subsequent payment from the account of £150,000 to an account belonging to the late Mr David Austin. He said that if he had been aware of these facts he would have had to examine them.

"I don't think it would have been necessarily fatal to the IPO once the purpose of the payment became clear." Mr O'Brien has said the payment to Mr Austin was for a house in Spain.

Mr O'Connell said if he had learned that the money sent to Mr Austin had been used to make a payment to Mr Lowry, he would have brought that to the attention of the Esat Telecom board as well.

He said he interviewed Mr O'Brien in Boston on November 1st, 1997, to assess his credibility. He did not take comprehensive notes as he wanted to maintain the flow of the interview and form an impression. He compared the responses he received to those Mr O'Brien gave to another solicitor's interview three days later. The Boston interview was not conducted by him as a rehearsal for the second interview, he said. He found that Mr O'Brien's story was "internally coherent" and consistent over the two interviews.