Desmond stake in Esat was unknown

RUMOURS surfaced that financier Dermot Desmond was an Esat Digifone shareholder when the consortium won the competition for the country’s second mobile phone licence, the Moriarty Tribunal was told yesterday.

Mr Desmond’s 20% holding wasn’t made known to Department of Communications officials when the first series of negotiations to secure the GSM licence took place in early November 1995.

Senior civil servant Martin Brennan, who chaired the project group that evaluated the bids for the licence, said he was not aware of changes in the consortium’s shareholding. The department understood the consortium was a joint venture between Denis O’Brien’s Communicorp Group and Norwegian company Telenor, with 20% of the equity to be placed with institutions.

Greg Sparks, programme manager to Tánaiste Dick Spring of Labour during the Fine Gael-led coalition government, has told the tribunal he expressed surprise when he heard the rumours of Mr Desmond’s shareholding.

He asked Mr Spring if Mr Desmond’s involvement in Digifone had been queried in the light of the report linking the financier to the controversial deal connected to the Johnston, Mooney & O’Brien site in Ballsbridge some time earlier.

On October 25, 1995, Mr Sparks recalled, the party leaders in the Coalition were meeting in Taoiseach John Bruton’s office when Mr Lowry rang Mr Bruton to say the report from consultants Andersen Management International on the second GSM licence had been received.

He understood Mr Lowry was invited to the Taoiseach’s office where the report in favour of Digifone were discussed and a decision was made to accept it.

“Some time following that meeting I met with the Tánaiste, who told me of the decision. I expressed surprise. I explained to the Tánaiste that the licence would, in my opinion, allow the recipient access to super profits. I understood that Esat Digifone at that time was not financially strong,” Mr Sparks said.

Tribunal lawyer Jerry Healy SC explained that programme managers would be given documents ahead of Cabinet meetings to sort out technical issues. In the Digifone situation Mr Sparks didn’t have the information.

Mr Brennan said if papers were circulated it would be impossible to protect confidentiality.

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