The case for another Tribunal on DCC/Fyffes

Even at a stage when the nation is depleted by Tribunal fatigue, there is a strong case for instituting a Tribunal of Enquiry into what happened in this DCC/Fyffes case and how the regulatory authorities failed to take any action or at least not sufficient action to respond to evidence of a fraud the likes of which the State has never seen before, perhaps with the exception of the Irish Hospitals Sweepstakes scam.

The scale of the offences concerned €80m (and more if there was impropriety by Fyffes) and the seeming indifference of the regulatory authorities to what occurred, justifies a comprehensive public enquiry. Nothing on this scale has occurred in any other area of Irish life and yet nothing was done for so long. This suggests that conduct of this kind is commonplace in the business community and is regularly condoned or overlooked.

The terms of reference suggested below would result in a contained enquiry, which should take no more than two years to complete. At worst its cost would be no more than €20m, a fraction of the size of the monies involved in the examined main transaction and, the total cost of the Tribunal should be fixed on those parties found to have been in breach of the existing rules.

As for the penultimate proposed term of reference, that too could be contained by reference into merely prima facie evidence, which might or might not result in a further enquiry.

The following might encompass the terms of reference of such enquiry:

1. An examination of evidence of criminality in the sales of the DCC shares in Fyffes, when there was insider, secret knowledge, available to the directors of Fyffes (who included Jim Flavin of DCC), which, if made public, would have impacted significantly on the price of Fyffes shares.

2. An examination of whether other directors of DCC were aware of the transaction and on the inside knowledge about Fyffes that was available to Jim Flavin

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3. An examination of what assistance was given by stock brokers, auditors, lawyers and other professionals concerning the sales of these shares by DCC in Fyffes and what level of knowledge such professionals had about the inside information that was available to Jim Flavin (this might require a change in legislation to allow this enquiry and to circumvent obstruction to such enquiry by claims of legal professional privilege and other professional privilege).

4. An examination of what knowledge other directors of Fyffes had of the transaction and of the information that was available to Jim Flavin and of what encouragement, if any, such directors gave concerning this transaction.

5. An examination of whether directors of Fyffes themselves were in breach of Stock Exchange rules or of the criminal law concerning presentations they made to would-be investors in Fyffes in January, February and March 2000 when information was available to them that the price of Fyffes shares might fall significantly.

6. An examination of the basis upon which the board of DCC claimed that the sale of the Fyffes shares in February 2000 was undertaken by a subsidiary,

Lotus Green, rather than by Jim Flavin, acting on behalf of DCC, and of the legal and regulatory implications of this claim, which was found to be false by the High Court.

7. An examination of the response of the Irish Stock Exchange to the fall in the value of Fyffes shares in March 2000, within weeks of the sale of the DCC shares in Fyffes.

8. An examination of the response of An Garda Síochána to evidence of possible criminality with regard to the transaction.

9. An examination of the response of the Director of Corporate Enforcement to the outcome of High Court and Supreme Court cases concerning this and the reasons that he may have been restrained from taking action on the basis of the Courts' findings.

10. An examination of the response of other regulatory agencies, including the Department of Enterprise, Trade and Employment and the Revenue Commissioners, to the evidence that emerged in this case from March 2000 onwards.

11. An examination of whether there is prima facie evidence of large scale insider trading (ie fraud) generally on the Irish Stock Exchange and, if so, whether further enquiries are appropriate and what remedies are necessary to combat this.

12. An estimate of the costs of the Tribunal of Inquiry that should be charged to those parties that have been found to have been in breach of Stock Exchange rules concerning insider dealing.
Vincent Browne