Evidence of a clumsy and ill-advised transaction

The proceedings of the past few days have thrown some light on the whole matter of a £420,000 sterling loan issued by GE Capital…

The proceedings of the past few days have thrown some light on the whole matter of a £420,000 sterling loan issued by GE Capital Woodchester in December 1999. They have also served to paint a confused and perhaps alarming picture.

Yesterday a former senior executive with the bank, Mr Michael Tunney, told of being approached by Mr Aidan Phelan in December 1999 and being asked for the loan as a matter of urgency.

Mr Phelan is an accountant and a man of substantial means. He is also a close associate of Mr Denis O'Brien, so close that he had signing rights over some accounts linked to Mr O'Brien in Woodchester Bank.

He acted as a consultant to the initial public offering (IPO) of Esat Telecom shares in the US in November 1997.

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As part of that process, Mr Phelan became aware of the crisis caused by concerns that a $50,000 donation to Fine Gael might have gone to Mr Lowry.

The IPO was further jeopardised by a comment Mr O'Brien made to a colleague to the effect that he had made a £100,000 payment to Mr Michael Lowry, the man who had overseen the awarding of a mobile phone licence to Esat Digifone.

Despite all this, it has now emerged that the tribunal is to be told that in September 1999 Mr Lowry approached Mr Phelan and asked him to help him get a loan for £420,000, and that Mr Phelan is to tell the tribunal he agreed.

He got in contact with Mr Tunney, with whom he had done business before. Mr Tunney said yesterday he was not told at the time of Mr Lowry's involvement with the loan.

Mr Tunney did say that earlier that year Mr Phelan asked him to meet Mr Lowry to discuss with Mr Lowry his overall financial position. It seems Mr Lowry was in something of financial crisis.

However, the most extraordinary fact is that Mr Phelan was openly stating the fact that he was assisting Mr Lowry, when any links between Mr Phelan and Mr Lowry could create suspicions that Mr O'Brien might be in some way involved.

Evidence was given by a Cork businessman, Mr John Daly, that he agreed during the course of a 15-minute social meeting with Mr Lowry in late 1999 to go guarantor for him for £420,000 sterling.

Mr Daly said he did this because Mr Lowry was a friend. He later changed his mind.

The tribunal is to be told that following Mr Daly's withdrawal from the deal, Mr Lowry was dropped from it. As a background to the whole affair are comments made to the bank at the time of the loan that Mr O'Brien was behind it all. The loan is yet another alleged link between Mr O'Brien and the former minister.

Mr Eoin McGonigal SC, for Mr O'Brien, made the point yesterday that the net effect of the evidence heard from another banker, Mr Anthony Moreland, was that Mr O'Brien was behind the loan transaction, and the money went to a UK company of which Mr Lowry was the registered director.

In other words, anyone who had bothered to look at the public files in the UK companies office, would have seen the money going to Mr Lowry.

If it was secret financial assistance to a former government minister it wasn't well hidden. If it was the result of a humane response to a plea from Mr Lowry for help, it was ill-advised. The tribunal's inquiries into the transaction continue today.