Witness says no massive conspiracy over Esat deal

A person would have to believe a "massive conspiracy" took place within a number of levels of the public service to believe Esat Digifone did not fairly win the State's second mobile phone licence, the tribunal has heard.

Mr Michael Walsh, chief executive of International Investment and Underwriting Ltd (IIU), which made more than €127 million from its involvement in Esat Digifone, said he had learned "absolutely nothing" from the tribunal's inquiry that suggested the licence competition was compromised.

He said the evidence indicated that the licence competition process was "hermetically sealed" from political interference.

The alternative was to believe in a massive conspiracy within a number of levels of the public service and he did not believe that was tenable. Mr Walsh told Mr Gerard Hogan SC, for IIU, that he had no reason to believe that the then minister Mr Michael Lowry ever did anything other than comply with the advice and recommendations of his civil servants.

He said that if the Department of Transport, Energy and Communications had not insisted in 1996 that IIU reduced its shareholding from 25 per cent of Digifone to 20 per cent, then it was likely IIU would have held on to the 5 per cent.

He added that it was the case, however, that Mr Denis O'Brien was constantly seeking to increase his shareholding in the company. He agreed with Mr Rossa Fanning, for Mr Lowry, that it would be "nonsense" to suggest that Mr Lowry or anyone else had a role in "thrusting Mr Desmond into the arms of Denis O'Brien". Mr Walsh said that after Mr Desmond had agreed in principle to get involved in Digifone, he had "delegated pretty much everything" to Mr Walsh to negotiate.

Mr Walsh said Mr Desmond was "probably on the golf course". He said the IIU investment in Digifone was, fortunately, "one of the good investment decisions that we have taken".

He told Mr John O'Donnell SC, for the Department of Communications, that IIU was a financial investor in Digifone and took no role in relation to such issues as Digifone's business plan, marketing, tariffs, and other technical matters.

The first time he had met Mr Lowry was on May 15th, 1996, the day before the licence was actually issued.

The tribunal resumes today with a new witness.