DCC report to go to corporate enforcer

THE REPORT of an inspector appointed to investigate unlawful insider dealing by DCC plc and its former chief executive, Jim Flavin, is to be given to the Office of the Director of Corporate Enforcement (ODCE) before it is circulated any further, the Commercial Court has heard.

The report, presented to Mr Justice Peter Kelly last Friday, relates to the €106 million sale of DCC’s stake in Fyffes in 2000. It followed court findings about these activities, which resulted in DCC paying Fyffes more than €37 million in damages. The report’s findings could provide the basis for disqualification proceedings against any persons involved in the share sales.

Mr Justice Kelly said a limited number of people in the ODCE would be allowed to see the report before the two companies see it and before any publication of it.

It is to go first to the Director of Corporate Enforcement, Paul Appleby, to give him an opportunity to make observations on it, Mr Justice Kelly ruled. He was told Seán Ward, an officer in the ODCE, had been nominated to receive the report and the judge ordered Mr Ward would decide who else in the office, including legal advisers, could see the report.

The judge ruled the matter should come back before him on January 11th, when the report should be made available to the two companies, subject to the Mr Appleby’s observations. It could then come back before the court a week later, during which time the firms could have considered it.

The judge said all who received the report would be subject to undertakings of confidentiality.

Mr Justice Kelly appointed senior counsel Bill Shipsey as inspector in July last year after he found circumstances suggesting unlawfulness in the conduct of DCC’s affairs relating to the 1995 transfer of the DCC stake in Fyffes plc and/or the sale of that Fyffes stake in early 2000.

The appointment of an inspector to DCC and its two subsidiaries, S L Investments Ltd and Lotus Green Ltd, was sought by Mr Appleby following the 2007 Supreme Court finding of unlawful insider dealing by DCC and by Mr Flavin in the sale of DCC’s stake in Fyffes.