DCC reiterates innocence over Fyffes share sale

Mr Jim Flavin, chief executive of business support services group DCC, has reiterated the company's stance that it is innocent of any wrongdoing relating to its sale of shares in fruit distribution company Fyffes, which netted it €85 million in February 2000.

DCC faces the possibility of five legal actions from groups in the US and the Republic over the sale.

A file on the matter has also been sent by the Irish Stock Exchange to the Director of Public Prosecution (DPP) alleging Fyffes's directors were involved in insider trading.

Fyffes has denied the allegation, saying no directors of Fyffes, "other than Mr Jim Flavin, were involved with dealings that are now being investigated".

But at DCC's annual general meeting in Dublin yesterday, Mr Flavin told shareholders and journalists that DCC was satisfied that none of its companies or officers was in possession of any price-sensitive information in February 2000 when DCC sold the Fyffes shares.

"The sale of shares in Fyffes by DCC subsidiary Lotus Green was undertaken with absolute propriety," Mr Flavin told yesterday's meeting.

He said the legal action being taken by Fyffes against DCC "is utterly without merit" and will be "vigorously rebutted".

Fyffes is suing DCC, claiming that, as a director, Mr Flavin received management information indicating difficult trading conditions ahead of a decision to sell Fyffes shares.

Eagle Star and Hibernian have also begun legal action against DCC and Mr Flavin. Both companies lost money after buying shares in Fyffes from DCC when the 10 per cent stake was sold.

In the US, two investment management groups, Boston-based Putnam Asset Management and Denver-based Founders Asset Management, are also suing over the sale.

After yesterday's meeting Mr Flavin said any legal action was unlikely to happen in the near term. He told The Irish Times he was also aware the Irish Stock Exchange had sent a file to the DPP on the matter.

"Like anyone else, we have read the papers," he said.

However, he added he had had no official contact with any one of the relevant authorities on the issue.

DCC also said yesterday that, while its first-half performance in the year is expected to be flat, it is looking forward to strong growth in the second half.

"The board believes that DCC is well positioned to achieve strong growth in the more significant second half of the financial year, which would result in good growth for the full financial year," it said in a statement.

Its IT unit has experienced more settled trading conditions in recent months. Healthcare is trading in line with expectations and its food business is budgeting for continued good profit growth, the company said.