Note by Telenor executive on IIU had 'many inaccuracies'

The Department of Communications would never have given the State's second mobile phone licence to businessman Mr Denis O'Brien if it had been unhappy about the involvement of financier Mr Dermot Desmond's IIU Ltd, Mr O'Brien told the tribunal.

Mr O'Brien said he couldn't recall hearing any report saying the Department was unhappy with IIU's involvement.

He dismissed criticism of IIU noted by an executive of Telenor, Mr O'Brien's partner in the Esat Digifone consortium that won the licence, as "a bit of a rant" that was "full of inaccuracies".

Mr John Coughlan SC, for the tribunal, asked Mr O'Brien about the note written by the executive, Mr Per Simonsen, in May 1996. At this stage Digifone had been awarded the licence but had not yet finalised its terms.

In the note, Mr Simonsen said he was told by Department officials that IIU was not "a favourable name" from an "Irish public" point of view. He concluded by expressing the hope that a sensible way could be found out of "this mess".

However, Mr O'Brien claimed that Mr Simonsen was under pressure at the time. There were "so many inaccuracies in the memo that I don't know what is true and what is untrue at this stage".

He couldn't imagine a civil servant saying that someone was not "a favourable name". There was a paper trail to show that he wasn't doing anything without informing Telenor executives.

He suggested that Mr Simonsen's emotions "got ahead of him". He was under "ferocious pressure" because the head of Telenor was in Dublin "looking over his shoulder". There had been a huge delay since the licence was awarded, and there were complications in drafting of the licence and the financing of the project.

Asked about the April 1996 letter in which Digifone first disclosed IIU's 25 per cent involvement in the consortium to the Department, Mr O'Brien said he never saw this as "some sort of a showstopper".

"Rightly or wrongly, it didn't concern me too much." Either the Department was going to agree to IIU's 25 per cent stake or it wasn't, in which case it would be lowered to 20 per cent.

Mr Coughlan said the Minister for Communications, Mr Michael Lowry, had fielded questions in the Dáil on Mr Desmond's involvement. He asked Mr O'Brien if anyone had had discussions with him to enable the Minister to answer these questions.

Mr O'Brien said he didn't recall anyone having a need to ask him for information, unless the Department had made inquiries to "our side" seeking information.

Later, Mr Rossa Fanning, barrister, for Mr Lowry, objected to this "illegitimate" question. It gave rise to a "constitutionally surreal situation" whereby a tribunal set up by the Oireachtas was trying to get behind the questions asked of a Minister in the Oireachtas. However, Mr Justice Moriarty said he thought the question pertinent.