Desmond involved with ESAT 'by chance'

Moriarty Tribunal: The financier Mr Dermot Desmond, who made more than £100 million from his involvement with the Esat Digifone consortium, became involved "totally by chance", the tribunal was told.

The entrepreneur Mr Denis O'Brien said Mr Desmond became involved when the two men began discussing Mr O'Brien's bid for the State's second mobile phone licence on a jet on the way back from a Glasgow Celtic-Liverpool soccer match.

Mr O'Brien said he was invited to the game by Mr Desmond. It was a social affair and there was no discussion of business on the way over, over dinner that night, or at the match the next day.

He said that in August 1995 he was having difficulty satisfying his Digifone partners, Telenor, as to the finances of his company Communicorp. "We went to Dermot because Telenor was still not happy," Mr O'Brien said.

Asked by Mr John Coughlan SC, for the tribunal, if he had "gone to" Mr Desmond, Mr O'Brien said that Mr Desmond had become involved "totally by chance".

On the way home from the match Mr Desmond began discussing Mr O'Brien's affairs with him and Mr O'Brien outlined the difficulty he was having satisfying Telenor. "He offered to help by underwriting the bid," Mr O'Brien said. He said that Mr Desmond said: "Let's see if I can help you on this." The conversation led to the initiation of negotiations that took "the guts of two months".

He said the critical issue was the percentage of Digifone that Mr Desmond would get. He sought 30 per cent and was offered 20 per cent and the two eventually agreed on 25 per cent.

Mr O'Brien said he did not feel the two men had a deal until they agreed on the percentage Mr Desmond would receive. "The night he agreed the 25 per cent I thought, hey, I have a deal with Dermot.

"Until I shook hands with him on the phone in Barbados, I didn't have a deal with him," Mr O'Brien said. He said at the time of the phone call Mr Desmond was in Barbados and he, Mr O'Brien, was in his office in Dublin with his father.

Mr O'Brien repeated his evidence that he had an oral agreement for the provision of £30 million to his company Communicorp, in 1995, despite there being no documentary evidence to support the evidence.

The tribunal has heard that at an oral presentation to the Department of Transport, Energy and Communications in September 1995, Mr O'Brien said he had an "irrevocable commitment" from US venture capitalists Advent International. The oral presentation formed part of the Esat Digifone bid for the State's second mobile phone licence. The discussions with Mr Desmond that were under way at the time were not mentioned at the presentation.

Mr Coughlan said Mr O'Brien's solicitor, Mr Owen O'Connell, had given evidence to the tribunal that he was told Mr O'Brien had been made a verbal offer by Advent but had not accepted it.

Mr O'Brien said his own evidence was that he (Mr O'Brien) had a verbal agreement with Mr Massimo Prelz of US venture capitalists Advent International, in relation to the funding.

He said that around the time of the offer there were different people playing different roles and he didn't explain everything to everyone.

He said he had a verbal agreement in relation to the matter with Mr Prelz and that the two men shook hands. Mr O'Brien said his evidence differed from that of Mr O'Connell but that didn't matter. "I was there," he said.

Mr O'Brien said that in a meeting with his consultants Mr Padraig O hUiginn and Mr P. J. Mara in the wake of the presentation, it was decided that it was desirable to try to strengthen Communicorp's finances.

Mr O'Brien is to continue his evidence today.