THE IRISH Takeover Panel confirmed yesterday that it had received a letter from a third party alleging that certain share dealings last year in Irish Continental Group (ICG) could be in breach of takeover rules.

In a statement to the Irish Stock Exchange, the Dublin-based watchdog said: "The panel confirms that it is considering certain matters relating to ICG which were referred to in a letter received by the panel from a third party."

The panel did not identify the author of the letter.

However, as revealed in The Irish Times last Saturday, the letter was sent to the panel by Kevin Beary, managing director of Dolmen Corporate Finance.

It alleges a link between the Philip Lynch-led Moonduster consortium and the Irish-backed Arkaga investment fund - both of which are shareholders in ICG.

If proven this could make the two groups concert parties and would have given them a combined shareholding last year of more than 30 per cent, the threshold at which a compulsory bid must be made for a public company by another entity.

This would put both groups in breach of Rule Nine of the takeover code, and could lead to a sanction for Mr Lynch's Moonduster consortium.

Neither Arkaga nor Moonduster has ever declared a link between the two parties to the stock exchange.

It is understood that the panel has sought information from Mr Beary and Arkaga on the information contained in the letter. The letter details a meeting recently between Mr Beary and a director of Arkaga, which bought shares in ICG last year.

Mr Beary states that the Arkaga director told him that the fund had acquired shares in ICG last year through a vehicle called Buchanan Holdings.

According to Mr Beary, the Arkaga director told him that the fund was involved in assisting the Moonduster consortium in its bid for the ferry company.

Moonduster comprises the One51 investment group and the Cork-based Doyle Shipping company. Moonduster controls 25 per cent of ICG, and failed last year in a bid for the ferry operator.

At one point Buchanan Holdings held 5.17 per cent of ICG, although most of this holding was sold recently.

ICG was the subject of a bitter takeover battle last year between Moonduster and a management bid led by the ferry company's chief executive, Eamonn Rothwell. Neither bid succeeded.

In addition, property developer Liam Carroll built up a stake of 29.24 per cent in the business. Mr Carroll used Dolmen to purchase shares in ICG.

Mr Beary told the takeover panel that he did not discuss his meeting with the Arkaga director with Mr Carroll.

ICG's shares closed down 1.8 per cent or 30 cent at 16.50.