Three of CI╔'s top executives largely concluded a multi-million-pound deal with Esat over the heads of the CI╔ negotiating team, which had been in the forefront of discussions with a number of firms, it was claimed yesterday.
They also acted without the advice of the company solicitor, Mr Michael Carroll, who told the inquiry he had been "alarmed" when he discovered how advanced the deal was.
Mr Carroll found out about it on May 19th, 1997, when he was faxed a copy of heads of agreement which had been drawn up by Esat and presented to Dr Ray Byrne, then head of programmes and projects at CI╔, and Mr James Gahan, then head of the CI╔ property department.
Mr Carroll said he was "less than impressed" with CI╔'s choice of partner. "At that time Esat was not much more than a logo," he said.
Mr Carroll was even more alarmed when he discovered that Dr Byrne was planning to brief the CI╔ board on the heads of agreement just over a fortnight later.
He believed the document gave Esat the right to "crawl" all over CI╔ property, restricted CI╔'s access to its own property and had very little financial benefit for CI╔.
"It would mean CI╔ would get nothing out of the deal other than trouble," he said.
He began negotiations with Esat's solicitors on amendments to the document with the board meeting deadline of June 4th in mind. He said he felt under pressure to do so.
"I found the distinct impression that the choice of Esat at that time was a done deal," he said.
Mr Carroll's assessment was rejected by Mr Gahan. While he was not happy with the heads of agreement, Mr Gahan did not regard a link-up with Esat as a done deal at that stage.
"I took the view that Esat could table what they liked, but unless it passed muster with our team (the negotiating team), it would not go anywhere", he said.
But his then subordinate, Mr Grogan, who had been part of the team, said Dr Byrne had telephoned him on May 20th to tell him of his plans to put the document before the board.
Mr Grogan said Dr Byrne told him the deal with Esat had been "largely agreed" with himself, the chairman, Mr Brian Joyce, and the then chief executive, the late Mr Michael McDonnell, and had been cleared with the chief financial officer, Mr Jim Cullen. Dr Byrne told him that CI╔ would now be talking exclusively to Esat.
"That was a fairly direct phone call - no punches pulled, straightforward. It did not leave much room for question," Mr Grogan said.
He agreed with the interpretation of Mr Noel O'Flynn TD, a member of the inquiry team, that a "twin-track" approach to the negotiations had emerged, with the negotiating team working on one level and senior management going over their heads.
"It's there in black and white", he said, referring to his note of Dr Byrne's phone call.
The inquiry heard that the heads of agreement were much amended by the time they were signed on June 16th. Mr Carroll was satisfied that they represented a reasonably good deal for CI╔.