[SBP]O'Reilly is taking us all for fools

Tony O'Reilly must take Irish citizens, who pay their taxes here and who have little choice but to use the dominant phone company, for fools.

Last week, as company chairman, O'Reilly treated the audience at Eircom's annual general meeting to his own version of history.

The audience was comprised mostly of Eircom employees and the telco's hired help. Despite being billed 'Setting the Record Straight', O'Reilly's sermon failed to address the recent and serious controversies facing Eircom.

The 20-page script predictably focused on the old controversies of Eircom's first flotation. But, significantly, it avoided the more serious issues of the company's record under his stewardship.

O'Reilly's business history of Ireland runs along well-worn lines. His speech led the somewhat bemused audience from the signing of the 1921 Anglo-Irish Treaty, via the 'Warrior Politicians' of the 1920s, and ended with the 'New Elizabethan' business leaders of the present day.

O'Reilly's take on history, of course, demanded that he refer to his own contribution to Irish business.

Just as predictably, the Eircom chairman told the AGM that the delisting of Eircom from the stock market by the O'Reilly-led Valentia consortium in 2001 was "an outstanding exercise''.

Irish citizens were "assured'' that "Eircom could not have been more efficiently and effectively prepared'' by Valentia for its return to stock markets last March.

Surely some of the Eircom board must have blushed when O'Reilly claimed that the phone company controlled only 44 per cent of the telecoms markets, as Eircom does not yet have a mobile phone business. Its dominance of the country's fixed line phone sector was, of course, not mentioned.

O'Reilly also selectively quoted glowing reviews by investment banks and advisers to the company. Some of the same advisers had earned large fees from the sale of Eircom to Valentia and its subsequent re-sale in over 24 months.

O'Reilly chose to pick over old controversies.

What he failed to address were the recent awkward and embarrassing issues revealed by this newspaper. At the height of the takeover battle in 2001, the tax law of the country was changed in 14 days to facilitate the takeover of Eircom by Valentia and the worker-shareholders of the Employee Share Ownership Trust.

The AGM did not hear from the chairman about the sorry evidence of the company's under investment in its access network. There was no mention of the slow roll-out of broadband services in the country.

Neither was the audience told about overcharging scandals featuring Eircom, nor about the way that O'Reilly, billionaire financier George Soros and venture capitalists earned millions of euro in just over 24 months from the privatised monopoly.

Nor was there any mention of Eircom's benign regulatory environment.

O'Reilly may treat Independent News & Media and Waterford Wedgwood like family firms.

But the importance of Eircom to the economy and the huge credibility problems created by its actions mean that history lessons of a style that would make the Communist Party of North Korea blush deserve to be treated with contempt.