Tribunal to be told of O'Brien's comments

The former chief executive of Esat Digifone is expected to tell the Moriarty tribunal he became concerned about comments Mr Denis O'Brien made immediately in the wake of the tribunal's terms of reference being published.

Mr Barry Maloney is expected to say that on their first meeting after the terms were published, in September 1997, Mr O'Brien raised with him the conversation they had in October 1996, where Mr O'Brien said he had given £100,000 to Mr Michael Lowry.

Mr O'Brien later said the comment was made as a joke but Mr Maloney is expected to say this was not what was said to him in September 1997. He will say Mr O'Brien told him the payment had never been made but had become "stuck" with an "intermediary".

Mr Maloney was concerned about the timing of the remarks and urged Mr O'Brien not to go ahead with the flotation of Esat Telecom, then 40 per cent shareholder in Esat Digifone. The men discussed the matter three times in the run-up to the flotation.

It is understood the two friends of 20 years fell out in 1997 and were on very bad terms by that autumn. Mr Maloney, a shareholder in Esat Digifone but not in Esat Telecom, wanted the mobile phone company to be floated in the US, and not Esat Telecom, the company controlled by Mr O'Brien.

The Moriarty tribunal was set up just before the November 1997 launch of Esat Telecom on the US Nasdaq. Mr O'Brien's comment to Mr Maloney about a payment to Mr Lowry was examined by directors and advisers to both Esat Telecom and Esat Digifone.

However, it is understood the inquiry into movements on accounts in Woodchester Bank belonging to Mr O'Brien reported to the Esat Telecom board and not that of Esat Digifone.

Mr O'Brien told the inquiry that he had "earmarked" £100,000 in this bank for payment to Mr Lowry.

Esat Telecom was Mr O'Brien's vehicle. The Esat Digifone board included Mr Maloney as well as representatives of Telenor and IIU Ltd, the two other companies which held shares in the mobile phone company.