Analysis: The court must decide if DCC had information that was likely to have materially affected the Fyffes share price. Colm Keena reports.

Yesterday morning, the chief executive of Fyffes plc Mr David McCann finished giving evidence after nine days in the witness box.

His evidence had been preceded by a six-day opening statement by counsel for Fyffes, Mr Paul Gallagher SC.

The bulk of Mr McCann's time in the box was spent being cross-examined by counsel for DCC plc, Mr Kevin Feeney SC, and could perhaps be viewed as the opening statement for the defendants.

One theme that was returned to again and again during the course of the cross-examination was the veracity of statements issued by Fyffes to the market in December 1999 and March 2000.

The reason Mr Feeney repeatedly queried Mr McCann on these seemed to be that, on one interpretation, they argue against the claim now being made by Fyffes that Mr Jim Flavin, the chief executive of DCC plc, was in possession of price-sensitive information when DCC sold Fyffes shares worth $106 million in February 2000.

In its outlook statement for 2000, issued on December 14th, 1999, Fyffes said it expected 2000 to be a year of further growth.

In a profit warning issued on March 20th, 2000, the company cautioned that it would not make its half-year figures, but said it was too early to call its figures for the full year.

In the witness box, Mr McCann said confidential information concerning trading, which Mr Flavin was given in December 1999 and January 2000 in his capacity as a non-executive director of Fyffes, made it clear that the company was in "serious trouble" and that trading was getting worse.

DCC's argument, put very briefly, is to ask how Fyffes can say the information Mr Flavin had concerning the company's prospects for 2000 was so conclusive, when the company itself told the market in December 1999 that it expected growth in 2000, and held out in March 2000 that it was still too early to say whether or not it would meet its full-year figures for 2000.

Mr McCann said the statement from December 1999 had not revealed the underlying concerns regarding trading that the company had at the time.

This did not mean the company had acted in bad faith in issuing the statement, he said.

In relation to the March 2000 statement, Mr McCann said the company might not have, at the time, done sufficient work at looking at the prospects for the rest of the year. In that sense, it was too early to call the year, he said.

The law states that persons should not deal if they are in possession of information that, if disclosed, would be likely to materially affect the share price.

There is no guidance as to the level of caution a person should exercise when trying to decide if he or she should not deal.

The Fyffes/DCC case is complicated by the fact that so much of the value of Fyffes' shares on March 20th 2000, was the result of the company's internet project, worldoffruit.com.

Viewed as a measure of the progress of the dot.com bubble, the US Nasdaq peaked on March 10th, 2000.

Yesterday Fyffes executive director Mr Jim Tolan said that by March 20th, 2000, the Nasdaq was only 1.5 per cent off its peak.

He said it was his belief that the drop in the value of Fyffes shares that occurred after its profit warning on March 20th was due to the profit warning itself rather than to any loss of market confidence in dot.com projects.

The March 20th warning contained a negative statement in relation to trading and a positive statement in relation to worldoffruit.com.

So was the confidential trading information that Mr Flavin had in February 2000 information that was likely to have materially affected the Fyffes share price at that date?

The issue will be explored for a few months yet, and then Ms Justice Mary Laffoy will make her decision.