O’Brien and Kilkenny in court over shares dispute

TWO of this country’s leading businessmen were involved in a High Court action yesterday over ownership of shares in a multi-million euro company which was set up to become involved in mobile phone operations in the Caribbean.

Proceedings brought by Osmond Kilkenny against Denis O’Brien opened for a short time before Ms Justice Mary Finlay Geoghegan but were adjourned to allow time for the sides to see if they could “narrow some of the issues” and later adjourned for mention in court on April 5 next.

In his action, Mr Kilkenny sought a declaration that he is beneficial owner of 13.5pc of the issued share capital of Digicel Ltd, with its registered office in Kingston, Jamaica.

He also sought an injunction restraining Mr O’Brien taking any steps to dilute the plaintiff’s shareholding in Digicel, and damages for alleged breach of contract.

In the defence, it was admitted that Mr Kilkenny and Mr O’Brien have at all material times been beneficial owners of shares in Digicel.

It was also admitted that they, and subsequently Leslie Buckley, agreed to invest in a company which became Digicel with the intention of acquiring mobile phone licences in Trinidad and Tobago and the subsequent development of that business.

The defence denied parts of the plaintiff’s claims and brought a counterclaim for an order for specific performance of the terms of settlement in compromise of the proceedings on terms in a letter dated October 23, 2001, and damages in lieu of, or in addition to, specific performance.

Dónal O’Donnell, for Mr Kilkenny, said Digicel was incorporated in October 2000 and was a holding company of a group of companies which hold interests in telecommunications in the Caribbean. There was a small amount of factual controversy between the parties about a small number of meetings.

It was Mr Kilkenny’s claim that he entered into a joint venture with Mr O’Brien in relation to pursuing telecommunications interests in the Caribbean. They had been co-operating for two and half years before the arrangement broke down.

Counsel referred to Mr O’Brien’s “extraordinary success story” in Irish business and his telecommunications interests here.

At the end of 1998/beginning of 1999 Mr Kilkenny was on the west coast of the US meeting a businessman who had interests in the Caribbean.

He learned that a company named Clico was interested in bidding for a second mobile phone licence in Trinidad and wanted to find a suitable partner. Mr Kilkenny thought of Mr O’Brien and Esat as a “perfect fit”.

In early 1999, Mr Kilkenny contacted Mr O’Brien and suggested that he/Esat might be interested in the venture. They got engaged in a joint venture with Clico. The Irish interest was to be 49%.

Mr Kilkenny and Mr O’Brien agreed on the arrangements. Mr O’Brien said he thought the arrangement could be done in terms of capital investment for about $30 million.

Mr Kilkenny said he would invest up to $6m and it was agreed that would entitle him to 20% of the business.

Later, Mr Kilkenny and Mr O’Brien were involved in a joint venture which was a successful bidder for a licence in Jamaica.