There are days at the Fyffes/DCC insider-dealing clash when there is little heard that is of great general interest.

On other days, such as yesterday, evidence is heard on a range of issues, each of which on its own is of significant legitimate public interest. Yesterday the big issue, however, was tax, DCC, and PricewaterhouseCoopers (PwC).

DCC chief executive Jim Flavin was, for the second day, responding to cross-examination from counsel for Fyffes, Paul Gallagher SC. Mr Flavin was personally involved in the matters that are at the heart of the case.

The court heard evidence of tax advice given to a DCC subsidiary, seemingly including advice to the effect that a misleading or fictitious letter should be written to support a tax structure that saved DCC approximately €17 million in capital gains tax.

In 1995, DCC set up a Dutch resident company, Lotus Green, to hold its 10.5 per cent stake in Fyffes, as part of a tax structure on which it received advice from Coopers & Lybrand, now PwC, both here and in the Netherlands, the court has heard. For the structure to work, the board of Lotus Green, the majority of whom were Dutch, had to have control over the shares in Fyffes.

If control rested exclusively in the Netherlands, the tax structure remained solid and any profit on the sale would be free of Irish capital gains tax (CGT). The profit on the shares when they were sold was €85 million. CGT is charged at 20 per cent.

However, if the actions of Lotus Green were in fact controlled from Dublin rather than Amsterdam, then the tax structure fell and any profit from the sale of the shares became subject to Irish tax. DCC had to tread carefully.

Mr Flavin was involved in contacts with Goodbody and Davy stockbrokers from January 27th to February 3rd, 2000, during which the possible sale of the Fyffes shares was discussed. Mr Flavin has told the court he was acting as a "conduit" between the brokers and Lotus Green and did not deal on February 3rd.

Mr Flavin had notified the sole Irish resident director of Lotus Green, DCC chief financial officer Fergal O'Dwyer, of the approaches from the brokers immediately after the first approach.

Mr O'Dwyer contacted the Lotus Green directors and this led to an early morning meeting of the company's board. This meeting in the Netherlands on February 3rd agreed that the company would sell the shares if it received offers above a certain price.

Yesterday the court heard that a letter was sent by the acting Lotus Green chairman, Herni Roskam, on January 31st, 2000, to the Lotus Green directors, suggesting that the board should meet because he, Mr Roskam, had noticed the strong increase in the price of Fyffes shares.

"It seems to me that we should consider a board meeting," he said.

Among those who received the letter was Mr O'Dwyer.

The minutes of the Lotus Green meeting did not record the fact that the true impetus for the meeting came from the approaches made by the brokers to Mr Flavin in Dublin.

Mr Flavin agreed that the directors who received Mr Roskam's letter would have known the true impetus for the meeting. He also agreed the reality behind the meeting was different from that outlined in the letter.

Mr Flavin said it was his belief that the letter from Mr Roskam was written for tax reasons, although he would prefer if later witnesses from Lotus Green were asked about the matter. He said he was aware that Mr O'Dwyer, from his statement, is expected to tell the court that he suggested "for tax reasons, it might be best if Mr Roskam dropped this letter or wrote this letter to him".

Mr Gallagher pointed out that, in the minutes of the Lotus Green board meeting of February 3rd, it was suggested that Mr Roskam wanted the board to meet to consider the upward movement in the Fyffes share price. Mr Flavin said he could not comment on why the minutes were the way they were but he did know that tax advice was received in relation to the letter.

Mr Flavin agreed with Mr Gallagher that, if it was not for the conversations taped by Davy on February 3rd, which were now available, there would be no record of Mr Flavin's role in the events leading up to the allegedly improper deals.