The Moriarty Tribunal has made 'adverse provisional findings' against the State into the granting of a mobile phone licence to Esat Digifone in 1996.
The admission is contained in a letter from the state to the Moriarty Tribunal which was read out at a re-convened sitting of the Tribunal in Dublin Castle.
One of the allegations being investigated by the tribunal is whether the Department of Communications went ahead and awarded the licence to the Esat consortium in 1996 knowing it to be in breach of competition rules.
This is because Dermot Desmond had become a major shareholder of ESAT at a critical phase of the licence competition.
In an opening statement today, tribunal counsel said the department was informed when Esat applied for the licence in 1995 that 20% of the consortium was to be placed with financial institutions.
However in April 1996, just weeks before a final decision was to be made it emerged that a company owned by Dermot Desmond held 25% of the consortium.
The State sought legal advice, however they claimed privilege over that advice for the last decade.
The tribunal heard that they had decided to lift privilege in the wake of a cabinet decision last March and in the wake of 'adverse provisional findings' against the Departments of Communications and Finance contained in a draft tribunal report furnished to interested parties last November.
The nature of the adverse findings were not disclosed.
The admission was contained in a letter from the Chief State Solicitor to the Tribunal, who said the two departments believed the 1996 legal advice dealt with the issue of Dermot Desmond's involvement in Esat Digifone.
The legal advice, read out before the Tribunal today, does not refer specifically to the ownership issue of Esat, but did say the Minister should not drag his feet in issuing the licence.
