O'Brien hung up during tense talks with Telenor about shareholdings

Moriarty Tribunal: Mr Denis O'Brien hung up during a telephone conversation with a senior Telenor colleague during tense negotiations surrounding shareholdings in Esat Digifone in September 1995, the tribunal heard yesterday.

Mr Arve Johansen of Telenor said relations with Mr O'Brien were so bad in late September 1995 that he feared for the future of the Digifone project.

He said Mr O'Brien tried to create the impression that he was a "very influential person" and that he had good sources of information. However, Mr O'Brien never referred to any "concrete channels". He was "vague" as to the source of his information, Mr Johansen said.

Mr Johansen said it was not correct to say that he was indicating that Mr O'Brien had access to information from official sources or that he had access to people who had access to official sources.

He told Mr Jerry Healy SC, for the tribunal, that a reference to "various very important sources" of Mr O'Brien's in a May 1996 memo was intended to mean advisers or consultants engaged by Mr O'Brien.

He said that in late September 1995 Mr O'Brien was seeking a reduction in Telenor's Digifone shareholding to 35 per cent, in order to facilitate negotiations Mr O'Brien was having with Mr Dermot Desmond.

Mr Johansen said Telenor insisted that it would at all times have an identical shareholding to Mr O'Brien. Despite concerns over the deterioration in the partners' relationship, Telenor held to its position.

At the time, September 1995, Esat Digifone had submitted its bid for the State's second mobile phone licence and was awaiting the result of the competition.

Mr Johansen said that when Mr O'Brien told Telenor that the addition of Mr Desmond to the consortium would raise the Irish profile of the bid and be advantageous, the Norwegians accepted this. He said he had "complete trust" in Mr O'Brien's understanding of the Irish scene.

Mr O'Brien knew the Irish scene, had set up a strong bid team and had strong local consultants working for him. When Mr O'Brien on occasion spoke of "important or useful sources of information", Mr Johansen took him to be referring to his consultants.

Mr Johansen said he had no knowledge of any meetings or contracts between Mr O'Brien and Mr Michael Lowry in relation to the licence. He could recall being told by Mr Per Simmonsen, of Telenor, in late September 1995, of a conversation with Mr O'Brien. Mr Simmonsen said Mr O'Brien had told him that he, Mr O'Brien, had met Mr Lowry in a pub and that Mr Lowry had told Mr O'Brien that it would be "helpful" if Mr Desmond's IIU Ltd was involved in the Digifone consortium.