Department not aware of change in consortium

The former secretary general of the Department of Transport, Energy and Communications, Mr John Loughrey, has agreed that the consortium which won the State's second mobile phone licence competition was not the same as the one which submitted the bid for the licence.

Mr Loughrey agreed with Mr John Coughlan SC, for the tribunal, that the "two-man" consortium which had submitted the bid had become a "three-man" consortium by the end of the competition and that this had happened unbeknownst to the team assessing the bids.

The tribunal has heard that the Esat Digifone bid envisaged the two partners, Communicorp and Telenor, each holding 40 per cent with the remaining 20 per cent being placed with financial institutions. However, in the period between the bid being submitted and the competition winner being announced, Mr Dermot Desmond was allocated the right to the 20 per cent. The team which selected the winning bid was not told of this.

The winning bid was announced on October 25th, 1995. The department did not learn of the nature of Mr Desmond's involvement until the following April. Mr Desmond's interest was placed with a private offshore investment vehicle, Bottin.

Mr Loughrey agreed that when the Government agreed in October 1995 to give Esat Digifone exclusive rights to negotiate for the licence, it did so believing the Digifone consortium had the ownership profile outlined in its original bid.

Following the exchange Mr Eoin McGonigal SC, for Mr Denis O'Brien, contested the suggestion by Mr Coughlan that the ownership of the Digifone consortium had changed between the date the bid was submitted, August 4th, 1995, and the date of the announcement that Digifone had won the competition. He said Mr Coughlan had "got it wrong". Mr Eoghan Fitzsimons SC, for Telenor, said he agreed with Mr McGonigal's submission. He said Mr Desmond's shares in Esat Digifone were not allotted until April 1996.

Mr Coughlan said no shares at all were allotted before April 1996. Prior to that date there was a joint venture agreement with parties holding entitlements to certain allotments.

Mr Loughrey said he had not been aware of meetings the then minister, Mr Michael Lowry, had with persons involved in two of the bidding consortiums, during the period when the bids were being assessed. Mr Lowry met Mr Tony Boyle of the Persona consortium in the bar of the Killiney Castle Hotel. He also met Mr O'Brien in a Dublin pub.

Mr Coughlan said the meeting with Mr Boyle was arranged by Mr Frank Conroy and that Mr Boyle has told the tribunal in a statement of intended evidence, that he made a "presentation" in respect of the Persona bid.

Mr Loughrey said he felt sure no one in the department knew of the meeting, as if they had, he would have been told and would have acted on that information. He said he was quite sure the minister would not have conferred any advantage on the Persona consortium but he would have been "less than happy" with the perception of such a meeting.

In relation to the pub meeting between Mr Lowry and Mr O'Brien, Mr Loughrey said if he had been there at the time he would have told the minister he should think of perceptions.