THE Minister for Energy, Mr Lowry, is to make a recommendation to the Cabinet next Tuesday on the position of Dr Eddie O'Connor as Bord na Mona managing director.
Intensive efforts are now expected to go into seeking a financial settlement with Dr O'Connor following preliminary contacts on Thursday. If these are not successful, Mr Lowry will have to decide whether to recommend the dismissal of Dr O'Connor or ask the board to vote on Dr O'Connor's position.
In the latest twist in the 11 week affair, a planned meeting of the board to vote on a motion of no confidence in Dr O'Connor, scheduled for yesterday, was called off after Mr Lowry indicated his intention to deal with "the matter directly.
The directors of Bord na Mona are understood to be deeply divided in their views of Dr O'Connor's position, and it was not certain the motion of no confidence would have been carried yesterday.
In a letter to Dr O'Connor last night, Mr Lowry invited him to respond to the conclusion of the company board that his pay breached government guidelines.
Mr Lowry's letter notified Dr O'Connor that he will now be taking the matter to the Cabinet, which is to meek on Tuesday.
The Minister made his decision after consideration of a letter he received from the Bord na Mona chairman, Mr Pat Dineen, on Thursday night, stating that the board had concluded that Dr O'Connor's remuneration package had broken the government guidelines. The letter was supported by all members of the board apart from Dr O'Connor.
The Fianna Fail spokesman, Mr Tom Kitt, said last night the affair had now become "the greatest shambles in the history of the semi state sector". While there were legitimate questions about his package, Dr O'Connor had been treated in a "disgraceful and shabby manner", he said.
Settlement discussions between Dr O'Connor's lawyers and the Department of Transport, Energy and Communications broke off on Thursday morning. It is unclear when further contacts will be made.
Last night Dr O'Connor told The Irish Times he was "absolutely disgusted" with yesterday's events. He had been ready to attend a board meeting at 5 p.m. but it had been cancelled 10 minutes beforehand. "I don't know what is going on and I don't think anyone else does either," he said.
Dr O'Connor has claimed he is the subject of a campaign to remove him because of his views on Bord na Mona's future. Mr, Dineen had been told to restrict Bord na Mona to cut overheads and concentrate on turf production, according to Dr O'Connor, who preferred to diversify.
Sources close to Dr O'Connor said on Friday that the managing director would not agree to any settlement unless it protected his. reputation. It is understood that Dr O'Connor would also seek the payment of £600,000 towards his pension and the salary owed under the remainder of his contract, which runs until next year.
Dr O'Connor may also seek immunity from any tax liabilities that might arise from the scrutiny of his remuneration package by the Revenue Commissioners that is currently under way.
During the nine years he was managing director, Dr O'Connor received £66,000 in unvouched expenses, mostly paid in cash. He also claimed £52,000 in business expenses which he later acknowledged were for his personal benefit.
The issue was brought before the Cabinet earlier this week after the board met for 13 hours on Monday night but could not agree on any course of action.
