MR Pat Dineen, the chairman of Bord na Mona, said he had been ached by the chairman of the board audit committee, Mr Sean Burke, last November. Mr Burke "brought to my attention a number of aspects of the pay and expenses of the managing director".
Mr Dineen said that the former managing director told him that the arrangement had been approved by the previous chairman, Mr Brendan Halligan.
However, Mr Dineen said he decided he could not stand over the arrangement. The chairman said he introduced new arrangements under which Dr O'Connor's expenses would be approved by him.
He said that, although he was "anxious that the company continue under the leadership of Dr O'Connor" he brought the matter to the attention of the Secretary of the Department, Mr John Loughrey.
He was obliged by law to do this as the Secretary was the representative of the shareholder, the Minister. Mr Loughrey suggested that the company's auditors, Price Waterhouse, be asked to provide a report on Dr O'Connor's remuneration. This report initially covered three years but, at the subsequent request of the Secretary, was extended to cover Dr O'Connor's nine years at the company.
After several meetings, the board of the company concluded on July 4th that Dr O'Connor's remuneration exceeded Government guidelines.
Mr Dineen also denied having any involvement in the leaking of information about the inquiry and said. "It was my intention in this case, as the record will show, to resolve this matter internally."
