Official 'never saw' Esat news reports

enior civil servant who was involved in the selection process for the 1995 Esat digiphone licence has admitted it seemed "unusual" he did not see newspaper articles containing "significant" information about the ultimately successful bidder.

Mr Fintan Towey, a member of the co-ordinating team at the Department of Transport, Energy and Communications, agreed with the Mr John Coughlan, SC for the tribunal, that articles in the Irish Independent and The Irish Times, contained "significant" information.

Although there was a press-cutting service, which saw newspaper items of relevance to the Department circulated to principal officers and senior staff, Mr Towey said he had no recall of a number of important articles.

In particular, he did not "specifically recall seeing" articles in the two papers on November 18th, 1995, which outlined details of financial advice being given to Esat Digifone.

The articles reported that International Investment and Underwriting (IIU) - a company owned by financier Mr Dermot Desmond - was advising Mr Denis O'Brien's consortium on placing 20 per cent of its shares on the market.

Mr Towey said he did not know of IIU's investment or role in the project

Mr Coughlan asked Mr Towey about a meeting nine days before the articles' publication between the Department and Esat Digifone. He asked him whether there was any attempt to "tie down Esat's financial position at that stage".

"I don't particularly recall that," said Mr Towey.

He later said that as late as November 21st, 1995, "nothing in relation to IIU registered in my consciousness".

In February 1996 "a fairly significant article in terms of the information contained in it" - according to Mr Coughlan - appeared in The Irish Times. It said Esat Digifone was seeking to raise £30 million in debt to fund its share of the £100 million needed to launch the second mobile phone network.

It further said the company was hoping to raise the bulk of the money in the US through loan notes.

Mr Coughlan said the piece was "significant" as it asked questions about how money was being raised and about the "bankability" of Esat Digifone.

Mr Towey said he had been on leave when the article was published but that he didn't recall "any discussion over the article".

He was asked whether the Department had ever taken advice from a bank "or from any financial adviser about the company Esat Digifone being bankable". It had not, Mr Towey said.