THE MAIN PLAYERS: DENIS O'BRIEN:Passionate business leader is a key player in world of media and communications, writes COLM KEENA
DENIS O’BRIEN (56) is one of the richest Irish businessmen of his generation and is the single largest owner of media assets in this State.
Capable of being charming and known for his informal and direct manner, he is also a very driven, hard-working and passionate business leader who is in part at least motivated by a desire to win.
“I spend my time thinking of ways to create a downfall for my competitors, particularly if they are big,” he told this newspaper some years ago. He described himself as an opportunistic entrepreneur. Entrepreneurs, he said, “never want to leave the casino”. Obsessed with sport as well as money, he is a former triathlon participant whose father, also Denis, was a champion diver in his youth.
A Dubliner, he attended UCD and Boston University, and worked for a time with the late Tony Ryan before deciding to set out on his own.He won a number of radio licences while pursuing property and other deals before branching into the telecoms area. He set up Esat Telecom to compete against the then State-owned Telecom Éireann in the landline sector in the early 1990s.
He caused something of a sensation when his Esat Digifone consortium won the 1995 competition for the right to negotiate for the State’s second mobile phone licence, and subsequently negotiated the granting of the licence. Ireland was one of the last EU states to introduce a private sector competitor to its mobile phone market. Esat competed aggressively for market share, raising hundreds of millions of euro abroad for investment here, and winning the highest market share of any newcomer in the EU in the late 1990s.
However tensions developed between O’Brien and his main partner in the consortium, Norwegian firm Telenor, and O’Brien eventually sold Esat Telecom – which in turn owned half of Esat Digifone – to British Telecom plc for €2.4 billion. The sale netted him in excess of €300 million.
His stunning business success at a relatively young age made him a star of the Celtic Tiger, though his image was tarnished somewhat when it emerged that he had moved residency to Portugal, thereby avoiding paying capital gains tax on his Esat gain. He is believed to have since moved his tax residency to Malta.
At the same time as the Esat sale he began the second major phase of his telecoms career, bidding successfully for a mobile phone licence in Jamaica, and successfully taking on the long-time incumbent, Cable & Wireless.
Digicel repeated the pattern of Esat in Ireland in the 1990s, winning market share and making no secret of its delight in doing so.
As well as setting up Digicel, O’Brien also used his funds from the sale to BT to establish a large golf and tourism resort at his new home at Quinto do Lago, in Portugal, while also buying and renovating a number of large and expensive houses in Ireland.
Working closely with colleagues such as Leslie Buckley and Lucy Gaffney, O’Brien also established a number of other successful entrepreneurial businesses, while continuing to run his Communicorp group of Irish and European radio stations. However, in 2001 his reputation suffered another and more severe hit when the Moriarty tribunal began investigations into possible financial links between him and Michael Lowry, the minister for transport, energy and communications at the time of the granting of the Digifone licence. Thundering down the staircase in Dublin Castle after an opening statement by tribunal counsel John Coughlan SC, O’Brien said angrily to this reporter: “There goes my reputation, out the window.” Disclosures concerning O’Brien and Lowry came at a time when O’Brien was part of a consortium bidding for Eircom plc, which by then was a public company that had sold off its mobile arm. His main competitor was a consortium involving Sir Anthony O’Reilly, and O’Brien became convinced that the Independent group, which was controlled by O’Reilly, was turned against him as part of the bid process.
The O’Reilly consortium won the fight for Eircom. Relations between O’Brien and the O’Reilly family have never recovered.
The tribunal’s inquiry took years and was not speeded up by a number of High Court and Supreme Court cases taken by O’Brien. While dealing with the tribunal in Dublin O’Brien grew his Digicel business into a major force in the Caribbean and further afield, winning licence after licence in various island states, including Haiti and Central America.
In 2000, O’Brien had been appointed to the “court” or board of the Bank of Ireland and in 2005 was appointed deputy governor.
However, in September 2006 he resigned from the post, citing the demands of his various businesses. During the mid-2000s there was continuing speculation that O’Brien would sell Digicel, or launch it on the New York Stock Exchange. In the event he did neither. In early 2007 he set up a new Bermuda-based company which bought the Digicel Caribbean group for $2.4 billion. As the major shareholder in the Caribbean group, he received $1.87 billion, while smaller shareholders such as Fianna Fáil adviser PJ Mara, accountant Greg Sparks, O’Brien’s father, and his close business colleagues Gaffney and Buckley, all got smaller sums. O’Brien invested $1.1 billion in the new company, which he owned in its entirety, leaving him with a war chest of more than $700 million.
Speculation at the time in this newspaper that he would use the money, at least in part, to launch an attack on O’Reilly’s control of the Independent group, proved to be correct.
As O'Brien built up his stake, the nature of the coverage of his dealings with the tribunal changed markedly in the Irish Independent.
The investment has proved to be disastrous in commercial terms. O’Brien spent something in the region of €500 million building up a 26 per cent stake only to see the company collapse into crisis with the general downturn. Bondholders who were owed €200 million which the company could not refinance, eventually ended up getting more than 48 per cent of the company as part of a debt for equity swap, while O’Brien and the O’Reilly family saw their stakes halved. O’Brien has since bought more shares in the group and is now its largest shareholder.
Meanwhile, his Communicorp group owns Ireland’s only two national commercial radio stations, Today FM and Newstalk, as well as Dublin pop station 98FM, Dublin youth station Spin 103 and regional station Spin SouthWest.
In July 2009 the Broadcasting Commission of Ireland ruled that O’Brien, despite his then 26 per cent stake in the Independent group and ownership of Communicorp, did not have an “undue” share of the Irish media market.
As well as his business career, O’Brien has run a parallel involvement in charitable or development work. He has set up and funded his own organisation, Frontline, which provides support to persons under threat as a result of fighting for human rights in various parts of the globe. He organises a lucrative annual dinner which raises funds for Amnesty International, an organisation which his mother, whom he described as a “serial protester” in one media interview, also supported. He received wide praise for his successful chairmanship of the Special Olympics in 2003, which were held here and saw 160 countries and over 30,000 volunteers become involved. O’Brien married former Communicorp employee Catherine Walsh in 1997 and the couple have four children.
KEY FINDINGS: WHAT REPORT SAYS
A payment of Ir£147,000 was made by Denis O’Brien to Michael Lowry (through others) during a period when Lowry held public office, in circumstances giving rise to a reasonable inference that the motive for making the payment was connected with the public office then held by Lowry.
Justifications advanced in evidence by Denis O’Brien for his remarks to Barry Maloney in relation to making a payment to Michael Lowry, suggesting the comments were a “wind-up” and bravado, were “inconsistent, unconvincing and implausible”.