Firm’s financial status played down

THE expert project group that selected Esat Digifone to run the country’s second mobile telephone licence played down the financial status of Denis O’Brien’s Communicorp group, the Moriarty Tribunal heard yesterday.

Just days before former Communications Minister Michael Lowry announced Esat as the winner, the project group was reporting that Communicorp, one of the consortium members, had negative equity. Referring to the O'Brien company, the GSM project group said the weakest point concerning Esat's application related not to the application, but the applicant behind the application.

The group's report, dated October 3, 1995, noted: "Should the consortium meet with temporary or permanent opposition this could, in the worst case situation, turn out to be critical, in particular to matters concerning solvency." Between then and October 18, 1995, the reference to the "weakest point" was changed to "maybe the weakest point". The project team which vetted all six applications for the GSM licence comprised civil servants from the Department of Communication and Department of Finance as well as Danish consultants Andersen Management International.

Tribunal counsel John Coughlan SC said yesterday it appeared this change might have been intended as a reflection of the GSM project group's discussions at their October 9, 1995, meeting where the views of Michael Lowry were referred to. At that meeting it was stated that the team must not contradict the case it was making either the Esat Digifone project was bankable or it was not.

The October 18 report of the expert group considered Esat to be the best applicant for the licence. It said its credibility had been assessed as extremely high, as it was the applicant with the highest degree of documentation behind the business case. Earlier, Mr Coughlan pointed to Margaret O'Keeffe's recorded minutes of the GSM project team's meeting of October 9, 1995, which stated that Minister Lowry doesn't want the groups's report to undermine itself. "A reasonable interpretation of Ms O'Keeffe's notes, both manuscript and typed, is that the minister appears to have had a certain knowledge and understanding of the details of the evaluation and that he may have in fact contributed to the overall approach to be adopted in finalising the evaluation, in particular in regard to financial consideration," Mr Coughlan said.

He said the tribunal would have to enquire to what extent the Minister was made aware of the details of the ranking of applicants, the precise state of the evaluation, and to the extent to which he contributed to the evaluation or the progress of the evaluation.