Ivan Yates, Claimed KPN was regarded as a long-term investor
Fine Gael's spokesperson on Public Enterprise, Ivan Yates, has said he will table questions in the Dáil after today's announcement by KPN and Telia that they are to sell their 35% share in Eircom. Ivan Yates has claimed that at the time of the flotation, the official prospectus inferred that KPN was regarded as a long-term investor. Eircom shares fell 2% after news of the sales this morning.
Mr Yates has said that buyers were repeatedly told that KPN was a long-term investor. They were also led to believe that KPN would buy Telia's 11% stake when they came to sell it. He said that the Minister, Mary O'Rourke, and her chairman, Ray McSharry, now had to provide an explanation on this issue. This evening, the Department of Public Enterprise said Telecom Eireann had clearly stated in its prospectus that six months after the flotation of the company, the two biggest shareholders, KPN and Telia, could dispose of their Eircom shareholdings if they so wished.
Mr Yates said that the news that KPN was selling its shares was very grave. He said that, given the nature of the imminent share price claw-back negotiated by the Rainbow government in December 1996, it is inexplicable that the option of a short-term exit by KPN was not foreseen and prevented by the government at the time of the IPO public share sale.
He said that it was vital for the Irish economy and was one of the reasons for the privatisation that Eircom would have the capacity for massive further development of telecommunications infrastructure. The Minister now had to state whether Eircom had the capacity to carry out such large-scale development. Minister O'Rourke's competence stood indicted for her failure to copper-fasten these issues in the process of the government selling their shares, he added.
