O'Brien under fire
Published:Wednesday | March 23, 2011 | 12:00 AM
Digicel distances itself from probe, but defends boss
Lavern Clarke, Business Editor
Digicel Group on Tuesday sought to distance itself from the findings of a probe into the conduct of Irish government officials and one of the member's alleged facilitation of Denis O'Brien 15 years ago to secure a mobile licence for the Esat Digifone consortium.
Digicel said it was in "no way affected or involved".
But the Jamaica-based telecoms, which is 100 per cent owned by O'Brien, has sided with its chairman and founder while touting his more recent accomplishments in the mobile market within the Caribbean and Pacific regions, after a tough report alleged that he paid monies to a government official and influenced his conduct.
The Moriarity Tribunal, in a second report out this week, concluded that Michael Lowry, who was then the minister in charge of transport, energy and communication, gave "substantive information" to O'Brien that assisted him in securing a mobile licence for Esat-Digifone, issued in 1996.
O'Brien was then chairman of the group.
Moriarity also alleged that £147,000 was paid secretively to Lowry by O'Brien, using different channels.
Lowry is alleged to have "imparted substantive information to Mr O'Brien of significant value and assistance to him in securing the licence".
The report also makes reference to the timing of political donations by O'Brien's company to Fine Gael in 1995 and 1996.
"In aggregating the known payments from Denis O'Brien to Michael Lowry, it is apposite to note that between the granting of the second GSM licence to Esat Digifone in May 1996 and the transmission of Stg £420,000 to complete the purchase of the latter of Mr Lowry's English properties in December 1999, Mr O'Brien had made or facilitated payments to Mr Lowry of £147,000, Stg £300,000 and a benefit equivalent to a payment in the form of Mr O'Brien's support for a loan of Stg £420,000," said the report.
"The value of these sums in today's terms is obviously well in excess of the amounts transferred at the various times mentioned in this report."
Both Lowry and O'Brien have dismissed the tribunal's findings, according to newspaper reports published in Ireland. Lowry called them "wrong and deliberately misleading", while O'Brien has called for an investigation into the conduct of the tribunal and its legal team.
Digicel Group went further to pronounce that the enquiry's conclusions - view report at http://www.moriarty-tribunal.ie - was that of one individual and had no legal teeth, and that Moriarty's conclusions had been rejected by O'Brien, who himself testified before the tribunal in 2003 and again in 2005.
"The tribunal is made up of one member, Mr Justice (Michael) Moriarty, who is expected to present what is referred to as a 'reasoned expression of opinion' relating to the matters he has investigated," said the statement forwarded to Wednesday Business by Digicel spokeswoman Antonia Graham.
"As a 'reasoned expression of opinion' the report has no legal effect or consequences."
Up to 3 p.m. Jamaica time and 8 p.m. UK time, a second statement expected from O'Brien had not yet been released, Graham said.
Esat was taken over 11 years ago, in 2000, by BT Telecom for £1.9 billion. O'Brien launched Digicel in Jamaica in 2001, after acquiring a mobile licence from Kingston. The Digicel Jamaica licence is held by Mossel Jamaica Limited.
He subsequently built out the group operation to more than 30 markets.
Digicel said O'Brien rejects the "opinions" set out in the Moriarty Report, while suggesting that his stance was buttressed by sworn testimony to the enquiry from "one former prime minister, five former government ministers, 17 civil servants and one senior European Union official", which the telecoms said "confirmed that the Esat Digifone consortium was awarded the second mobile phone licence on the basis of being adjudged the best bid".
Esat Digifone reportedly had 42 per cent market share at its sale to BT Telecom.
Since then, O'Brien has invested US$4.5 billion to build out Digicel's international 32 markets, employing 5,500 people who serve more than 11.5 million customers. He will soon exit two markets in Central America, while simultaneously acquiring Claro Jamaica, in a deal with the America Movil subsidiary. The transaction is subject to regulatory approval, expected in the second quarter.
The telecoms operation has been one of the drivers behind O'Brien's growing wealth, which rose US$700 million last year to US$4.2 billion, according to the 2011 Forbes Billionaires List. O'Brien has also invested in a radio group, other media, property, aircraft leasing, golf and other leisure interests.
"Denis' vision, drive, energy and integrity continue to be integral to Digicel's success. This has seen the company win and operate 32 mobile licences across the globe," said Digicel Group.
The tribunal of inquiry was set up to probe the financial affairs of Lowry and former Taoiseach or prime minister Charles Haughey. The investigation of the GSM mobile licence award was sparked five years later by reports of potential financial links between Lowry and O'Brien.