Tribunal hears of Desmond decision

Fri, Mar 19, 2010, 00:00

The Department of Communications decided in May 1996 that Dermot Desmond’s IIU could not have a 25 per cent stake in the State’s second mobile phone licence, then about to be issued, the Moriarty tribunal heard today.

John O’Donnell SC, for the department, said it was the then secretary general, John Loughrey, who decided the shareholding configuration in the Esat Digifone consortium would have to reflect the bid document that had been submitted a year earlier.

In the bid Esat had said it would be owned 40-40 by Denis O’Brien and Norwegian company Telenor, with four financial institutions to hold the remaining 20 per cent.

By the time the licence was about to be issued, Mr Desmond’s IIU had replaced the proposed institutions, but with a 25 per cent stake, with the remainder being shared equally between the other two shareholders.

Denis McFadden, a barrister with the office of the Attorney General, told John Coughlan SC, for the tribunal, he did not know at the time that the department was insisting on the 40-40-20 configuration.

At the time the office had commissioned advice from senior counsel Richard Nesbitt, who said the 25 per cent shareholding held by IIU, was not a barrier to the issuing of the licence to Esat.

The tribunal adjourned early for lunch after complaints from counsel for Mr Desmond and Mr O’Brien to the effect that documents on which legal privilege had earlier been claimed by the State, were emerging in a piecemeal fashion.

Jim O’Callaghan SC, for Mr O’Brien, said documents could not be “cherry picked” in this way and that he was being placed at a disadvantage.

The chairman, Mr Justice Moriarty, adjourned the hearing to allow the matter be dealt with.