DCC IS facing calls from senior institutional investors to move in advance of its annual general meeting (agm) in July to name a date for the retirement of executive chairman Jim Flavin. ARTHUR BEESLEY, Senior Business Correspondent, reports.
The agm will be crucial for DCC as it will be open to investors to withhold their support for board resolutions if they do not receive a satisfactory reply from the firm. Firms such as DCC typically expect a high level of support from institutional shareholders in votes on board resolutions.
The renewal of pressure on Mr Flavin comes a week after his company, which has interests in energy and healthcare, settled a High Court claim for damages from fruit importer Fyffes. The bulk of DCC's €41 million settlement payment will go to Fyffes.
The Supreme Court unanimously ruled last year that Mr Flavin engaged in illegal insider-trading when he sold DCC's stake in Fyffes in 2000. In spite of that, DCC's board unanimously backed Mr Flavin.
DCC previously indicated Mr Flavin would continue as executive chairman until July 2010. However, it is understood from several high-level sources that certain investors want DCC to bring forward his retirement. They are not prepared to support him taking on the post of non-executive chairman when he retires as executive chairman.
The Irish Association of Investment Managers (IAIM), which represents institutional investors, took no action against DCC on foot of the Supreme Court ruling.
The body never publicly explained its stance, although some sources believed it did not want to take action while the litigation with Fyffes was before the courts.
While the IAIM resumed its consideration of the case last week, it has yet to make contact with DCC or seek any meeting with its senior independent director, Michael Buckley.
However, informed sources in a number of quarters said the case was now being examined with some urgency by major institutional investors in the Irish market.
In any new discussions between Mr Buckley and the IAIM, the agm will be seen as the "end date" by which the company must indicate when Mr Flavin will be retiring.
Mr Buckley, a former chief executive of AIB, has said the DCC board debated whether it should sack Mr Flavin after the Supreme Court ruling but concluded it would not in the interests of justice and fairness.
Still unclear are the intentions of Paul Appleby, the official enforcer of corporate law. Mr Appleby wanted the High Court to determine whether anyone should be disqualified as a director in light of the Supreme Court ruling, but that avenue was closed to him when the settlement was reached.
Mr Appleby is now assessing whether he will take his own proceedings against Mr Flavin and others.