Financier Dermot Desmond first became involved with Denis O’Brien when his venture capital firm IIU underwrote the Esat Digifone consortium’s bid for the state’s second mobile phone licence to the tune of £6m in 1995. Explaining his reasoning for assuming a risk other institutional investors would not, Mr Desmond told the Moriarty tribunal in 2004 how he had relished the challenge it presented to him. “Unlike the conditional interest expressed by the proposed institutional investors, I was prepared to take the downside as well as the up.
“Denis may be a Goliath now but he was a David then and I like helping the Davids of this world,” he said. The risk Mr Desmond took paid off handsomely, with IIU going on to realise some €100m from its stake in Esat following the company’s sale in 2000.
Esat Digifone, founded by businessman Denis O’Brien, said it would be 40 per cent owned by O’Brien’s Communicorp group, and 40 per cent owned by Norwegian group Telenor. The remaining 20 per cent would be placed with four named institutional investors, it said.
However, in April 1996, as the department was preparing to issue the licence, it was told the institutional investors had been replaced by Dermot Desmond’s IIU Nominees Ltd.
The civil servants involved in the process sought legal advice as to whether the licence could be issued to Esat, given the divergence between its shareholding then and the intended shareholding outlined in the original bid.
In time, the licence was issued. The tribunal has made adverse findings against the department related to this. The legal advice furnished to the department came from Richard Nesbitt SC, a member of its legal team at the tribunal.
IIU Nominees was registered as a company in November 1995. In June 1997 a charge was registered against the company, via an overdraft facility provided by AIB.
Here is the charge:
I am not sure how this charge relates to the current story, but it is all interesting nonetheless.
Here is the full document: