The High Court will hear a case relating to the Central Bank of Ireland's investigation of businessman Philip Lynch's insider dealing in Bulmers Cider maker C&C's shares later this month.
Mr Lynch is reported to have accepted a €75,000 fine, and disqualification from being involved with a regulated financial services company for five years, for contravening market abuse rules in October 2008, when he was a director of C&C.
The Central Bank found that Mr Lynch used inside information to buy shares in the company when he knew that Maurice Pratt was stepping down as chief executive.
Both the Sunday Times and the Business Post reported that the Central Bank’s enforcement division found beyond a reasonable doubt that Mr Lynch had inside information when he bought the shares on October 21st, 2008.
John Dunsmore, chief executive of rival Scottish & Newcastle, replaced Mr Pratt. Mr Lynch was aware that C&C was in talks with Mr Dunsmore, but was not certain he would be appointed.
Scottish & Newcastle’s success in competing with C&C had helped depress the Irish company’s share price through 2007 and 2008. His arrival boosted C&C’s stock by 19 per cent, while they increased from €1 to €3 over the following year.
Well-known figure
A case relating the Central Bank’s enforcement process is due before the High Court on May 23rd, legal filings show. The bank applies to the court to confirm sanctions that it imposes.
Insider dealing is where an individual connected with a stock market-listed company attempts to use inside or confidential information gained as a consequence of that to profit from trading in its shares.
According to the reports, Mr Lynch’s lawyers maintained that he did not gain from buying the shares and had lost €833,620 overall on C&C stock as of January 30th, 2009.
There was a one-year embargo on directors selling shares they had bought in the company.
The Central Bank found that Mr Lynch made all the necessary disclosures about his trades in C&C shares to the Irish Stock Exchange and did not attempt to disguise the transactions.
Mr Lynch, from Co Cork, is a well-known figure in Irish business. He is a former chief executive of publicly quoted IAWS and One51, and was previously a chairman of An Post.
