Telenor feared O'Brien majority in Digifone

Moriarty Tribunal: Mr Denis O'Brien's Norwegian partner in Esat Digifone feared that the Irish businessman would gain a majority shareholding in the company by getting control of shares held by Mr Dermot Desmond, the tribunal heard.

Mr Amund Bugge, a lawyer working for Telenor in 1995-1996, told Ms Jacqueline O'Brien, for the tribunal, that this was the main concern of Telenor on May 16th, 1996, the date the State's second mobile phone licence was issued to Esat Digifone. A "side letter" dealing with the matter was signed prior to the issuing of the licence, he said.

A memo written by Mr Bugge around this time recorded that Mr O'Brien had wanted a majority shareholding in the company from the outset of Telenor's dealings with him.

After Mr Desmond's company, IIU Ltd, became involved with the consortium on September 29th, 1995, the Norwegians became concerned that some of the 25 per cent to be held by IIU might be assigned to Mr O'Brien or to a nominee acting for Mr O'Brien.

The tribunal also heard that Mr O'Brien told Telenor that the Department of Transport, Energy and Communications was against Mr O'Brien's company, Communicorp, being given financial support by Telenor.

However, a Telenor executive, Mr Arve Johansen, was later told the opposite by the Department.

Mr Johansen believed that Mr O'Brien was trying to limit Telenor's influence within the consortium.

Mr Bugge explained that he had just graduated from law school in 1995 and that Telenor, a state-owned company, did not have a developed legal department experienced in matters of commercial law.

He said that at a key meeting on the day the bid for the licence was submitted, he attended the offices of William Fry solicitors on his own to represent Telenor. This meeting continued until just minutes before the bid for the licence was due to be delivered to the Department.

When the meeting ended Mr Bugge jumped into Mr O'Brien's car, and they drove at speed through Dublin to the Department.

Mr Bugge said that after Mr Desmond became involved with the consortium he was told that the Irish financier had previously been "in some sort of difficulty with the Irish authorities". He believed he was told this by Mr Per Simonsen of Telenor.

He did not believe he was given any further detail and believed the matter had been resolved and that Mr Desmond had by 1995 been "rehabilitated".

His impression was that Telenor was not concerned as it had been told by Mr O'Brien that Mr Desmond was being brought on board because it would be helpful to the bid.