IAIM keeps silent after meeting DCC director

The Irish Association of Investment Managers (IAIM) has declined to say whether it will be taking any further action after it discussed the Supreme Court ruling against DCC with Michael Buckley, the firm's senior independent director. Arthur Beesley, Senior Business Correspondent, reports.

The body oversees corporate governance in listed companies but it has made no public statement on the unanimous support of the DCC board for the company's executive chairman Jim Flavin.

The Supreme Court ruled that Mr Flavin held inside information when selling the firm's stake in Fyffes for a profit of €85 million. It is understood that DCC does not anticipate taking any action in light of Mr Buckley's meeting with the IAIM. Given the board's full support for Mr Flavin, that suggests his position will be safe at least in the immediate term.

The IAIM would not say where the meeting took place or who represented it.

Its dialogue with Mr Buckley followed a meeting on Thursday of its Market Instruments Committee.

According to the IAIM website the members of the committee are Paul Cahill - of AIB Investment Managers; Ivan Fox of Bank of Ireland Asset Management; Eimear Moloney of Eagle Star; Harry White of KBC; Colm O'Neill of Irish Life and Richard Dunn of Oppenheim.

The committee is chaired by Philip Kearney of Hibernian Investment Managers, but he is understood not to have chaired the meeting because Hibernian may pursue DCC for damages as it bought some of the Fyffes shares in question.

"I can confirm that Michael Buckley met the IAIM. We have no further comment to make," said DCC's spokesman.

There was no comment from the IAIM, whose membership includes big internationally owned institutions and the largest Irish financial groups.

It is believed that the IAIM wanted to explore with Mr Buckley the thinking behind the board's support for Mr Flavin and the way in which the directors arrived at their decision.

In a letter last Monday to the IAIM, DCC highlighted favourable aspects of a High Court ruling in the case which were cited by the Supreme Court but not tested by it. The High Court found the share trades were not illegal but its ruling was overturned by the Supreme Court.

DCC's board said it remained strongly of the view that the continuation of Mr Flavin as executive chairman was in shareholders' best interests.

The Director of Corporate Enforcement, Paul Appleby ,has indicated that he is examining the Supreme Court judgment. He has prosecutorial power in relation to suspected breaches of the Companies Acts and he also has power to seek the disqualification or restriction of company directors.

The Office of the Director of Public Prosecutions took no action on foot of a 2001 report on the share trades from Irish Stock Exchange. It is not known whether the Supreme Court judgment will prompt a renewed examination of the case by the DPP, who retains prosecutorial power in relation to any questionable stock market transactions before mid-2005.