Case will have been going on for 86 weeks if it finishes on Friday

Colm Keena

The mammoth Fyffes/DCC insider dealing case has this week been hearing submissions from Fyffes. Next week DCC will have its four-day turn and then, if all goes to schedule, Fyffes will have a final word on Friday and the case will at last come to an end.

Originally due to last six weeks the case will, if it does in fact end next Friday, have gone on for 86 days. It sat for four days a week, making for 21 and a half weeks in total and will leave the loser facing a huge legal bill.

During the week, Fyffes has made a strong allegation against DCC chief executive and former Fyffes non-executive director Jim Flavin.

Fyffes alleges that Mr Flavin had price sensitive information in February 2000, when DCC offloaded the bulk of its shareholding in Fyffes, and that he was personally involved in the deals. A few weeks after the sale, Fyffes issued a profit warning and its share price plummeted.

Mr Flavin went to his company's compliance officer and to a solicitor acting for DCC prior to the sales and sought clearance for them given his position on the board of Fyffes. However, Fyffes' counsel Paul Sreenan told the court: "He deliberately sought clearance based on incomplete and inaccurate information."

Furthermore, Mr Sreenan said, the case made by Mr Flavin during the trial in relation to this issue was a construction based on information Mr Flavin did not have at the time.

"His attempt to justify his actions based on this piece of retrospective research, by putting forward something that couldn't have represented his state of mind at the time, in our submission, significantly undermines his credibility."

DCC and Mr Flavin say the information Mr Flavin had was not price sensitive and that, anyway, the deals were done by a Dutch resident subsidiary called Lotus Green. Mr Flavin was not a director of that company and did not deal, he says.

He did have contacts with the brokers involved in the share sales but says he was acting as a conduit for Lotus Green.

Brian Murray SC, also for Fyffes, said the evidence from DCC had been "defined by a series of what might be described as catchphrases". Mr Murray submitted that the content of the catchphrases used by the DCC witnesses, and the reasons they were used, were of significance.

"Mr Flavin was a conduit for unsolicited bids for the brokers. He was reacting to events. The people in Lotus Green were keeping their heads down - a phrase used, indeed, by [Dutch director] Mr Diepenhorst in the course of his evidence. I don't know if there is an analogous phrase in Dutch, but this was his view, we were keeping our heads down."

Mr Murray said the impression of passivity created by these phrases "does not sit well, easily, or at all, with the Mr Flavin that the court has heard evidence from and whom the court has heard described by other witnesses in the course of the evidence. I don't mean that in any derogatory way. Mr Flavin is a person who was in control."

In late January 2000, Mr Flavin told DCC finance director Fergal O'Dwyer, who was the sole Irish director on the board of Lotus Green, that he was concerned that Dutch board would not be in a position to meet if a bid was made for the shares. Fyffes has submitted that the comment in fact constituted a direction to Mr O'Dwyer to convene a meeting of Lotus Green.

DCC, for its part, is saying that this is unfair and that management in DCC knew that Lotus Green had to be controlled from the Netherlands or the tax scheme that led to its establishment would not have worked.

Mr Murray said DCC and Lotus Green were concerned "not with making sure that things happened in a particular way, but with making sure that the record recorded them as happening in a particular way".

Mr Sreenan submitted that the information that was available to Mr Flavin in February 2000 was self-evidently price sensitive and contested the argument from DCC that the information available to Mr Flavin would not have materially affected the Fyffes share price if it had become generally available, given the information that was available concerning exchange rates and banana prices.

What Mr Flavin had was two trading reports for Fyffes for November and December 1999, the first two months of Fyffes' 2000 year. The cumulative situation outlined was that, by the end of the first quarter, Fyffes expected to have losses of €2.6 million, or €14 million behind their prior year position. The market was expecting increased profits for the year of up to €90 million.

"Most of all we say that our view as to price sensitivity is supported by common sense," Mr Sreenan said.