Maloney `concerned' at O'Brien's comments

A comment by Mr Denis O'Brien that he had made two £100,000 payments threatened to "unravel" both Esat Digifone and Esat Telecom, the chairman and former chief executive of Esat Digifone said.

Mr Barry Maloney, who was chief executive officer of Esat Digifone until June 2001, said he was placed in a very difficult position in October/November 1997 when Esat Telecom was planning a public offering (IPO) in the US and he developed concerns about comments Mr O'Brien had made a year earlier.

He said Mr O'Brien was anxious that he not tell representatives of the Norwegian company Telenor of his concerns. At the time, Telenor owned 40 per cent of Esat Digifone. Esat Telecom had a similar holding and Mr Dermot Desmond's IIU Nominees Ltd held the remainder. Mr Maloney said he made no commitment to Mr O'Brien.

He said that on the night of November 14th, 1997, just three days before the IPO, Mr Mal oney went to Mr O'Brien's home to make a "last gasp" plea to Mr O'Brien to delay it.

Mr O'Brien was not at home, and he had a glass of wine in the kitchen with Mrs O'Brien and another woman while waiting. Last week, Mr O'Brien said he came home from dinner with his wife to find Mr Maloney sitting on his doorstep. Mr Maloney denied this. Mr Maloney said he first met Mr O'Brien at the Pre-University Centre in Merrion Square, Dublin, and they developed a strong friendship.

He said in December 1996 he resigned as chief executive of Esat Digifone in order to save the friendship. Mr O'Brien came out to his apartment in Malahide and pleaded with him to return. Mr Maloney's resignation threatened to undermine fund-raising by Mr O'Brien's company, Esat Telecom.

After he resigned he received a phone call from Mr Desmond who "offered me a payment of £250,000 to come back on what he saw as a temporary basis, at least 30 days after the launch of the company". He told Mr Desmond he wasn't interested in a financial inducement, rather the proper governance and management of the company.

He eventually returned as chief executive but by August 1997 had a difficult business relationship with Mr O'Brien and no personal relationship.

In August 1997, during what were regular meetings, Mr O'Brien raised the comments he had made almost a year earlier about two £100,000 payments. In a reference to a payment to Mr Michael Lowry, he said: "Thank God I didn't do it. The payment never went through." Mr Maloney said he was "taken aback" and wondered why Mr O'Brien was raising the matter at that time.

During September 1997, Mr Maloney said he became concerned about Mr O'Brien making the comment while the Moriarty tribunal was being established and the IPO documentation was being prepared.