Multimillionaire Denis O'Brien was dragged back from his holidays abroad to give 10 minutes evidence on something he said he knew nothing about, writes Colm Keena
On Monday the multimillionaire entrepreneur Denis O'Brien stormed down the stairs from the Moriarty tribunal and out into the yard of Dublin Castle.
"Denis, are you upset?" asked a radio reporter who knew him from the early days of 98 FM. "That would be an understatement," he replied, steely-faced. He'd been dragged back from his holidays abroad to give 10 minutes evidence about something he said he knew nothing about.
Last year he'd thundered down the same set of stairs in a similar humour. The tribunal had just read out a lengthy opening statement describing possible financial links between Michael Lowry and him. As is always the case, it finished off by saying it was now going to investigate these matters in public session.
A line had been crossed. Mr O'Brien (44), expressed disbelief to this reporter as he stormed down the stairs afterwards. "It's outrageous!" he said. "That's my reputation they've just torn up in there."
In truth being publicly identified as being under investigation by the tribunal is the same as being asked have you stopped beating your wife. The problem is compounded by the fact that the tribunal process is so slow. A final report on whether Denis O'Brien gave money to Michael Lowry and, if he did, why he did, is unlikely to be published for a few years yet, possibly not until 2004 or 2005.
It was all so different in January 2000, when telecommunications and technology companies generally were all the rage and the Irish economy was the envy of the world. Many Irish people were having difficulty absorbing the fact they lived in such a vibrant economy. Then Mr O'Brien held a press conference in the Berkeley Court Hotel to announce that his company, Esat Telecom, was being sold to BT for approximately €2.5 billion. He was going to net almost €300 million from the sale. It was one of the defining moments, perhaps, of the Celtic Tiger tale. Boyish-faced, a full head of blond hair, a pleasant smile. Not only was he so much richer than the rest of us, it was almost as if he didn't age like the rest of us.
Asked what was he going to do with all the money, he said he wasn't sure but he would definitely be having "a bit of craic". It was a typical comment from a man who does not come across as pompous, who seems, so to speak, to be one of the lads.
The truth, of course, is more complicated. No one creates a telecoms company from nothing while growing a number of other ventures, and at the same time being nice to everyone. Denis O'Brien is a very driven, energetic and able man. He won a radio licence competition and set up 98 FM and then won the second mobile phone licence competition and set up Esat Digifone.
Both ventures have been successful. After selling Esat Telecom, a 40 per cent shareholder in Esat Digifone, to BT, he left the company and headed up a consortium which made a pitch to buy Telecom Éireann's fixed line business. It was a bold move and showed he was very much still a force to be reckoned with in Irish business. In the event, his bid lost out to a group fronted by Sir Anthony O'Reilly.
He has built up a new mobile phone company in Jamaica, Digicell, which has a turnover of approximately US $250 million per annum and is set to become as valuable as Esat Digifone was in 2000. Outside business he has developed his interest in international human rights issues, through the development of the Front Line trust, which he has funded. However, even back in the late 1990s there were ominous clouds on the horizon. The Moriarty tribunal was set up in September 1997 and was charged with investigating Michael Lowry's affairs and whether he made any decision which benefited anyone who gave him money.
Because Esat Digifone was such a major element in Esat Telecom, the fact that this tribunal existed had to be mentioned in a document drafted for the launch of Esat Telecom shares on the US market in late 1997. The document said it was not expected that Mr Lowry's decision to award a licence to Esat Digifone would be compromised by the tribunal. More than US $100 million was being raised and investors could not be allowed claim they had not been warned of possible snakes in the grass.
Earlier in 1997 Mr O'Brien, during a conversation with Mr Barry Maloney, the chief executive of Esat Digifone, said he'd thought of giving money to Mr Lowry, whom he likes, and added: "I didn't actually do it, thank God."
Mr Maloney*, who wanted Esat Digifone to be floated before Esat Telecom, because he had options in the former but not the latter, became concerned about Mr O'Brien's comments and urged him to delay the Initial Public Offering (IPO) of the Esat Telecom shares. Mr O'Brien did not agree.
In time Mr Maloney brought his concerns to the attention of the Esat Digifone board. The Esat Telecom board was also informed. Highly confidential meetings were held in the offices of Mr Dermot Desmond's company, IIU, in the IFSC. Mr Desmond was a 20 per cent shareholder in Esat Digifone. It was decided to examine Mr O'Brien's bank accounts to look for evidence of money going to Mr Lowry. Mr Aidan Phelan, Mr O'Brien's accountant, assisted the investigation. Mr Desmond suggested that if nothing was found then Mr O'Brien's word that he had not given money to Mr Lowry would be accepted and that would be the end of the matter. The trawl through Mr O'Brien's accounts found nothing suspicious. His word was accepted, the IPO went ahead, and the march towards the sale of Esat Telecom to BT continued apace. However, one matter had been overlooked. In late 1996 and on Mr O'Brien's instructions, a large amount of money had been moved from one of Mr O'Brien's accounts by Mr Phelan and lodged to an account opened in Mr Phelan's name in the Isle of Man.
Some of this money, £150,000, was then given to the late Mr David Austin, who some months later gave the bulk of it to Mr Lowry. The Isle of Man account was not brought to the attention of the inquiry which proceeded the IPO. It has since been discovered by the tribunal.
Mr O'Brien has told the tribunal the payment to Mr Austin was for a house in Spain he bought from the late Smurfit executive. Mr Lowry has said the money was given to him by Mr Austin as a loan, to be used to renovate a new house Mr Lowry bought in Blackrock, Co Dublin, in late 1996. In 1997, after Mr Lowry's resignation from government in disgrace, the house was sold and the money returned.
The tribunal has discovered three other financial transactions which may link Mr O'Brien to Mr Lowry. Mr Phelan was involved in two of them, UK property deals where he used money which he received in payment from Mr O'Brien. This occurred in late 1998 and 1999. Given what had happened at the time of the IPO, this was a reckless move by Mr Phelan.
Following his windfall from the sale to BT, Mr O'Brien moved his base to Quinta do Lago, in Portugal, to a property he bought for £25 million in 1998. He became tax resident there and thereby managed to avoid having to pay Capital Gains Tax (CGT) on his BT money. He saved €63 million. Mr O'Brien is now moving back to Dublin, having been away for the required amount of time.
He is married, with two children. He met his wife Catherine during the 98 FM days. They had their second child during the sittings of the Moriarty tribunal last year and her birth led to his refusing to attend to give evidence on the stipulated date. It was his first major spat with the tribunal. Relations are close to an all-out declaration of war. Mr O'Brien has developed a dislike of the two main tribunal barristers, Mr Jerry Healy SC, and Mr John Coughlan SC.
He has one brother and two sisters. He seems close to his father, Denis snr, a businessman who went on RTÉ's Joe Duffy show last year to vent his spleen, complaining about the "inquisition" in Dublin Castle.
Mr O'Brien has said he welcomes the decision of the tribunal to have a comprehensive examination of the mobile phone licence competition, so the innuendo, which has existed since the licence was awarded, can finally be laid to rest. He has a few years yet to wait. If in time it is found that he made no payment to Mr Lowry then his sense of grievance will be understandable. Even if it does transpire a payment was made, the issue of something having been done in return is another matter entirely.
• Corrections and Clarifications: The above article states that Mr Barry Maloney, former chief executive of Esat Digifone, wanted the company floated before Esat Telecom because he had options in the former but not the latter. Mr Maloney points out that a similar suggestion was put to him during cross-examination at a Moriarty tribunal sitting in July 2001, and he had denied in evidence that that was the case.