Jim Flavin says he did not play an active role in accepting or rejecting any bid for DCC's shares in Fyffes, writes Colm Keena, Public Affairs Correspondent

If the Fyffes/DCC clash in the High Court was a sporting event then commentators would say that yesterday saw the beginning of one of the crucial periods of the contest.

The cross-examination of Jim Flavin, chief executive of DCC, began in the afternoon, with Paul Gallagher, one of Fyffes' three senior counsel, asking the questions.

Mr Flavin, who when answering questions from his own counsel, Kevin Feeney SC, had been sitting so he was facing both the barrister and Ms Justice Mary Laffoy, shifted position when the cross-examination began.

He shifted so he was more directly facing the judge and had his back turned, to a limited extent, towards Mr Gallagher. Mr Gallagher addressed his questions to Mr Flavin and Mr Flavin addressed his answers to the judge. The judge, for her part, made little or no eye contact with Mr Flavin.

Mr Gallagher's questions tended to be short and to the point, while Mr Flavin's answers tended to be relatively lengthy. On occasion, Mr Gallagher felt, at the end of an answer, that he still had not received a reply. On one occasion, Mr Gallagher felt the need to ask the same question three times.

The cross-examination opened immediately on the issue of the tapes made by Davy Stockbrokers on February 3rd, 2000, and on which Mr Flavin can be heard talking with the head of the equity desk at Davy, Ronan Godfrey.

One of the two key issues in the case is whether Mr Flavin actually dealt in Fyffes shares on behalf of DCC in February 2000. Mr Flavin and DCC say the dealing was in fact done by a Dutch resident subsidiary, Lotus Green. Mr Flavin has said he merely acted as a conduit between the brokers and Lotus Green.

During the February 3rd conversations, Mr Flavin and Mr Godfrey were recorded talking about a bid made the previous day to Mr Flavin. Yesterday, Mr Flavin agreed that the word "bid" was used but said it was used in a loose way.

On February 2nd, Kyran McLaughlin of Davy spoke with Mr Flavin and there was talk of the entire DCC holding in Fyffes being purchased at €3 a share.

Mr Flavin told Mr Gallagher this was not a bid but an expression of confidence by Mr McLaughlin that Davy could put such a bid together.

In response, Mr Flavin said to Mr McLaughlin that another broker had said he was interested in a substantial amount of stock at the going market price, which was around €3.30. This was a reference to a conversation Mr Flavin had had a few days previously with Roy Barrett of Goodbody Stockbrokers.

Mr Flavin did not accept Mr Gallagher's proposition that a proper characterisation of his conversation with Mr McLaughlin was that he had rejected Mr McLaughlin's bid.

"Judge, I am not comfortable with the word 'rejection'. I do not think it is a correct representation. What actually happened is I did not accept on behalf of Lotus Green an unsolicited offer or indication of a high level of confidence if you like, from Kyran McLaughlin, of an ability... I did not, I just informed him what the situation was, I did not play an active role in accepting or rejecting, I acted as a conduit."

Mr Flavin said he reported all his conversations with Davy and Goodbody back to Fergal O'Dwyer, finance director of DCC and a director of Lotus Green. Mr O'Dwyer was able to act as he saw fit on that information.

Mr Flavin said that, if he had been free to negotiate for DCC in early February, he would have negotiated a higher price for the first tranche of shares sold.