A leading exploration expert insisted yesterday that his decision to promote the launch of Feltrim Mining at a time of crisis in the industry had "nothing to do" with the fact that its principal was Mr Charles Haughey's son. The fact that Mr Conor Haughey was "the son of the prime minister" of the day bore no relationship to his decision to promote its prospects, Mr Emmett O'Connell told the Moriarty tribunal.
"It may have added a little lustre to the situation but it was not a motivating factor from our viewpoint."
As head of Texas Continental Securities, he had been approached by Mr Haughey as someone with a track record in bringing new exploration stocks to the market.
Initially, Davy Stockbrokers had shown no interest in the proposal on the grounds that there were too many mining companies in the late 1980s. Mr O'Connell had reacted similarly at first, but then advised Mr Haughey that he should, perhaps, concentrate on the diamond sector of the industry. "I felt they should change direction to diamonds. There was some interesting work being done in this area in Australia and Canada, and as we now know, Ireland, too, had possibilities."
In any event, the exploration industry generally had undergone a crisis in 1987, the year before Feltrim was floated on the Dublin and London stock exchanges. Liquidity was tight and new capital was extremely scarce. Another crisis followed in 1990.
"Feltrim Mining, as a small company without previous experience coming onto the market, was looking for capital, contrary to what the brokers were trying to achieve," suggested Mr John Coughlan SC, for the tribunal.
The exploration sector was somewhat unusual, replied Mr O'Connell. Mr Haughey had drilled a test well at Galmoy and he had the advice of Dr Niall Haughey, a well-regarded geologist. The initial modus operandi was to try to develop the company's prospects, in the hope of achieving a "strike" and on the basis of this track record, to return to the market for more capital.
Contrary to earlier reports, he had not put up £100,000 in share capital to help launch Feltrim, said Mr O'Connell.
As part of the underwriting initiative he had invested £10,000 and Texas Continental had taken up £15,000 worth of shares. He had never been a director and disposed of his shareholding within six months of the flotation on April 1st, 1988.