The Fyffes - DCC explanation

On Wednesday, 21 May last, the DCC board issued a statement explaining their support for Jim Flavin, in spite of the Supreme Court finding of 10 months previously.

The statement placed heavy reliance on the judgement of Mary Laffoy, the judge in the High Court, in the case brought by Fyffes in January 2002 against DCC and Jim Flavin and in particular, on the finding by the judge (in December 2005) that the information which Jim Flavin had as a director of Fyffes was not price sensitive and therefore acting on it was not unlawful.

An oversight committee of the Board, comprising of Michael Buckley, Bernard Somers and Maurice Keane had been established to examine the Supreme Court judgement and it recommended a settlement of the case with Fyffes announced, on 14 April last, of €41m. It argued that Jim Flavin did not use price sensitive information and that the High Court had found this to be so. But because of a technicality in Irish law (which has since been amended), the mere dealing in shares whilst in possession of price sensitive information was illegal, even when that information was not relied upon.

In other words this was a mere technicality and should not be taken seriously because there was no intentional use of insider information. In other words, that the sale of the Fyffes shares at a time when the share price was at a peak and when it was obvious there would be a drop in the share price in the very near future, because of the information available to directors about the trading performance, was merely a co-incidence. And, by inference and by way of comment (by us), nobody should pay any attention to the Supreme Court judgement.