O’Brien affidavit says ‘sinister’ dossier could have been compiled to affect Digicel IPO

Businessman’s affidavit also says the IPO was ‘suspended for external market reasons’

 Denis O’Brien’s  Digicel is carrying about $6.5 billion in debt and needs to invest in high-speed fibre, fixed-line and cable TV services. Photograph: Swoan Parker/Reuters

Denis O’Brien’s Digicel is carrying about $6.5 billion in debt and needs to invest in high-speed fibre, fixed-line and cable TV services. Photograph: Swoan Parker/Reuters

 

Denis O’Brien’s affidavit several times mentions the stock market flotation of Digicel, his Caribbean-centred mobile phone service provider, from which he had hoped to raise $2 billion.

However, the much-heralded IPO, which O’Brien had hoped to price between $13 and $16 a share, was aborted on October 6th, less than 72 hours before it was due to happen.

O’Brien’s affidavit says the IPO was “suspended for external market reasons”. Market sources indicated an investor willingness to pay only between $9 and $11 a share, considerably below the hoped-for price.

The affidavit continues: “While I am aware of no specific intention on the part of any specific person in this regard, the dates of authorship and compilation of the [memory stick] documents demonstrate a clear possibility that the Dossier could have been compiled for the purpose of preventing a favourable outcome to this process. In fact the Prospectus for the IPO forms part of the Dossier complained of and is a sinister matter for which I say I am entitled to make further inquiries and to seek an explanation as to whom this was distributed to by the First Named Defendant [Red Flag Consulting], its agents or servants.”

Digicel, which is facing ever-growing competition in the Caribbean from Cable & Wireless (CWC), is carrying about $6.5 billion in debt and needs to invest in high-speed fibre, fixed-line and cable TV services.

Furthermore, CWC is on the verge of being bought out by John Malone of Liberty Global, one of the richest men in the world, making it potentially an even stronger competitor for Digicel.

The Digicel IPO needed approval from the US Securities and Exchange Commission (SEC), the US federal government authority that seeks to protect investors by ensuring US stock markets obey the law.