THE DIRECTOR of corporate enforcement has said he will now consider whether to take his own proceedings against DCC executive chairman Jim Flavin and others, following the settlement of the Fyffes/DCC insider dealing dispute yesterday.
In what may have been the largest commercial settlement to date involving the courts, DCC has agreed to pay €41 million to settle the case. Of this, €37.6 million will go to Fyffes. Four counter-parties will receive €3.4 million between them.
Fyffes' legal costs in the case were €11.8 million, meaning it nets €25.8 million from the action it initiated in January 2002. In a short statement to the Stock Exchange, Fyffes said it was "pleased" to announce the deal. DCC in its statement said the settlement was in line with the exceptional charge of €50 million it announced earlier and which included providing for its own costs. The Fyffes case against Mr Flavin and DCC alleged that he was in possession of price-sensitive information when he sold Fyffes shares worth €106 million in February 2000.
In his defence, Mr Flavin said a DCC subsidiary had dealt in the shares and not him, and that the information he had was not price sensitive. In December 2005 the High Court ruled he had dealt in the shares but the information he had was not price sensitive. Last year, the Supreme Court ruled that the information was price sensitive and the case was returned to the High Court to decide on the level of damages. Yesterday the court was told the matter had been settled.
Lawyers for the director of corporate enforcement, Paul Appleby, had earlier this year drawn the court's attention to the fact that it could, of its own motion, decide on the basis of evidence heard, to impose company law restrictions if it thought fit. While Mr Appleby or his lawyers did not name anyone in particular, he did in an affidavit refer to his concern that "any persons who actively participated in insider dealing transactions should be able to continue to discharge leading roles in Irish corporate affairs".
The settlement means Mr Appleby will now have to initiate his own proceedings if he wants to ask the court to restrict Mr Flavin or any other person. His lawyers have said he has concerns about matters to do with both Fyffes and DCC.