Desmond finances probed day before contract awarded
The licence was granted to the Denis O’Brien-led Esat Digifone consortium.
On secondment from Pricewaterhouse Coopers, Donal Buggy yesterday described how civil servants asked him to analyse the Digifone backers on May 13, 1996. He particularly focused on Mr Desmond’s financial status.
He said Mr Desmond’s financial adviser and accountant Pearse Farrell, of Farrell Grant Sparks, told him the international financier was resident abroad and his assets were spread worldwide.
Asked by tribunal lawyer John Coughlan SC to explain what was meant by this, Mr Buggy said Mr Farrell said because the assets were spread worldwide it was going to be difficult to track them all down.
In a memo of his findings to department secretary general John Loughrey, Mr Buggy described Mr Desmond being worth “at least £40m” and in a position to meet his 20% Digifone share equity and underwriting commitments.
A document confirming this, supplied by Mr Farrell, said Mr Desmond had unencumbered assets worth £77m.
Questioned about Mr Desmond’s track record at the time, Mr Buggy said it was pretty good. He had owned and sold the NCB stockbroking firm.
At the time he presumed he would have been aware of the Glackin Report and inquiry into the sale of the Johnston Mooney & O’Brien site in Ballsbridge to Telecom Eireann. He had not read the report.
During the three days Mr Buggy spent carrying out his financial analysis he said he had informal discussions with Mr Loughrey on the issues that were coming up.
He denied being asked to conduct this work the previous month.
Asked if he had a month to do the work whether he would have pursued matters in greater detail, Mr Buggy said he would have pursued them in as much detail as the department wanted him to.
Mr Coughlan said it appeared notes by Mr Buggy and Department of Finance accountant Billy Riordan, who had concerns about aspects of the GSM2 evaluation process, weren’t put to a meeting of the project team on October 9, 1995.
Mr Buggy rejected counsel’s suggestion that the reason neither accountant expressed such views at that meeting was because they had been told Minister Michael Lowry already knew the shape of the evaluation and the rankings of the bidders..
The tribunal adjourned until next week.