ANALYSIS:The latest row at the Moriarty tribunal concerns the ownership of Esat Digifone in 1996, writes COLM KEENA

BUSINESSMAN DENIS O’Brien and former Government minister Michael Lowry have claimed a document drafted in May 1996 contradicts one of the provisional findings made by the Moriarty tribunal.

The tribunal’s findings were issued confidentially late last year to interested parties and the tribunal has threatened to injunct any media outlets that seeks to reveal any of their content.

The tribunal’s findings cover two main areas: whether O’Brien gave money or financial support to Lowry; and whether Lowry conferred any benefits on O’Brien. The big ticket item in the latter respect is the mobile phone licence issued to O’Brien’s Esat Digifone in May 1996.

However, this item in turn breaks down into two items. One is the 1995 competition process which was won by Esat Digifone. The consortium won the right to enter exclusive negotiations with Lowry’s department and the licence was awarded in May 1996.

The document which caused Lowry and O’Brien to issue statements at the weekend is one drafted by barrister Richard Nesbitt in May 1996, following a request for his views from the Attorney General’s office.

Nesbitt was supplied with the information Lowry’s department had, concerning the bid submitted by Esat in 1995, and the make-up of Esat at the time the advice was sought. There was a difference between the two, and the department wanted to be sure this didn’t prohibit it from issuing the licence.

In short, the bid document referred to O’Brien’s Communicorp having 40 per cent, Norwegian company Telenor having the same shareholding, and to Davy Stockbrokers organising the placing of the remaining 20 per cent with institutional investors such as AIB, Investment Bank of Ireland, and Standard Life.

However, in April 1996 Owen O’Connell of William Fry solicitors wrote to the department to inform it that Dermot Desmond’s IIU Ltd held 25 per cent of the shares, with Communicorp and Telenor sharing the remainder.

Nesbitt’s legal advice covered a number of issues. It did not go into detail on the share ownership issue but it did make the overall point that the final award of the licence to Esat should in his opinion go ahead.

“Delaying does not achieve any end,” he wrote.

A ruling issued by the tribunal chairman, Mr Justice Michael Moriarty, last year on the issue of legal privilege, considered the Nesbitt document. In the course of the ruling, he stated that the issue raised by the department in respect of the shareholding issue was not addressed in the Nesbitt document.

While it is not considered in detail, it does, however, appear to be covered by Nesbitt’s key conclusion.

The department was claiming legal privilege over the Nesbitt advice up to recently, but the department has now lifted that privilege, seemingly as a reaction to the provisional findings of the tribunal in so far as they affect the department. Details of what is in the document appeared in the media on Sunday, prompting O’Brien to say: “The document fundamentally and comprehensively rubbishes the claim of political interference in the awarding of the licence.”

He said the document proves the provisional findings of the tribunal are “false and fundamentally flawed” and called for them to be withdrawn.

He didn’t elaborate, but from the context it would appear from all that is known that he was referring to a finding of political interference in the licence award, as against the licence competition process.

Further insight is provided by Lowry’s response, that the document shows there was no improper behaviour by him in relation to the the award of the licence.

During its public hearings on this issue, evidence was heard about the deliberations which occurred within the department after it learned that Desmond’s IIU had a 25 per cent stake in Esat. It was disclosed that the department and Lowry insisted that the 40:40:20 breakdown of the shares in Esat should be put in place prior to the issuing of the licence.

That is what occurred, with Desmond selling part of his stake back to his two partners in the consortium. The consortium’s shares were therefore being traded before the company had received the hugely valuable licence from the State.