The Moriarty Tribunal has made adverse preliminary findings against the State in its long-running inquiry into the granting of a mobile phone licence to Esat Digifone in 1996, it was disclosed today.
Reconvened sittings of the tribunal in Dublin Castle heard that the Cabinet decided on March 10th of this year to lift legal professional privildge over advice received from barrister Richard Nesbitt SC in April 1996, just prior to the issuing of the licence.
The claim of privilege over the legal advice had been maintained for the duration of the tribunal's marathon inquiry, which began in 2001.
In the course of a letter from the Chief State Solictor's office on March 13th, the tribunal was informed that the State had decided to lift privilege in the wake of a cabinet decision on the matter and in the wake of "adverse privisional findings" against the Departments of Communications and Finance.
Both departments were involved in the licence 1995 licence competition process which led to the licence being awarded to Esat Digifone in 1996. The nature of the adverse findings were not disclosed.
The Chief State Solicitor's letter said its clients - the two departments - believed the advice from Mr Nesbitt dealt with the issue of the ownership of Esat Digifone prior to and after the issuing of the hugely valuable licence.
In an opening statement today, tribunal counsel Jacqueline O'Brien SC said the department was informed when Esat applied for the licence competition that 20 per cent of the consortium was to be placed with institutional investors and that Davy Stockbrokers had placed this shareholding with AIB, Investment Bank of Ireland, Standard Life Ireland, and Advent International.
However in April 1996 a solicitor at William Fry solicitors wrote to the department saying that Dermot Desmond's IIU Nominees now held 25 per cent of the consortium, with this being "effectively" the shareholding that had been identified as going to the institutional investors in the original application.
The other main shareholders were Denis O'Brien's Communicorp, and Norwegian firm Telenor, who each held 37.5 per cent. These were the founding shareholders who submitted the application. The department was concerned that the new shareholding configuration might not be compatible with the consortium that had made the application and sought legal advice.
Mr Nesbitt's legal advice does not refer specifically to the ownership of Esat at the time of his advice, but does deal with whether the minister might retain control over changes in ownership in the period after the issuing of the licence. However the covering letter with the advice says he does not believe the minister should delay in issuing the licence.
Ms O'Brien said the re-convened hearings are to hear evidence from the former secretary general of the Dept of Transport Energy and Communications, John Loughrey, as well as senior civil servants Martin Brennan and Fintan Towey. Mr Brennan gave evidence over 13 days in late 2002 and early 2003, while Mr Towey gave evidence over 11 days in early 2003.
They have also given evidence on other days. Today's sittings arise from responses to the tribunal's preliminary findings, which were issued in November of last year. The former Minister for Transport, Energy and Communications, Michael Lowry, attended today's hearings as an observer.