Norwegians feared O’Brien would seek full control
When the Digifone partners came together the previous year, Mr O'Brien expressed the desire to be the majority owner. However, the sides agreed on a 50:50 joint venture and if they won the GSM2 licence - to hold equal stakes and earmark the remaining 20% for third-party investors.
In early May, 1996, senior Telenor figures became concerned the Digifone chairman's Communicorp Group would take over all or part of the 25% then held by Mr Desmond, who had also come on board as an underwriter in September, 1995.
Arve Johansen, a key Norwegian executive, had a major concern that part of the Desmond stake might be secretly transferred for Mr O'Brien's benefit, according to solicitor Amund Bugge of Telenor's legal department in a memo dated May 7, 1996. This anxiety was eventually dealt with in a side letter dated May 16, 1996, the day the licence was handed over.
Mr Bugge said he had heard from Telenor sources of Mr Desmond "having been in some sort of difficulty with the Irish authorities but that he had been rehabilitated" and that the matters had been resolved. Witness said he had not then known about the Glackin Report.
Tribunal lawyer, Jacqueline O'Brien, BL, asked if Telenor colleague Per Simonsen had given him a broad outline regarding the sort of difficulty Mr Desmond had been in with the Irish authorities.
Mr Bugge said he could not recall getting any more specific information on this matter. He was also informed this had not happened one or two years previously. "I had the impression it was long ago, quite a few years ago, so it was in the past."
His own impression was that there was no need to be concerned about Mr Desmond's reputation at that stage. He understood Mr Desmond and his company were involved in the consortium to enhance its prospects of winning the licence. Mr Bugge believed Mr O'Brien would not have involved Mr Desmond if that would pose a problem for the Irish authorities.
Hours before Digifone delivered its GSM2 bid to the Department of Communications on August 4, 1995, the joint partners were at loggerheads over how to resolve a crux Telenor saw over Communicorp's financing.
Mr Bugge described a heated meeting running into the early hours of that morning as Telenor sought assurances on the status of a funding offer to Mr O'Brien from venture capital company, Advent International. That meeting was inconclusive and they had to return at 10am for more discussions. The deadline for delivery of the bid was midday.
Although Mr Bugge's instruction was to secure a financial guarantee of the highest quality, Telenor eventually settled for less. Witness did not remember seeing any copy of the financial agreement between Mr O'Brien and Advent.
