DCC plc chief executive Jim Flavin has told the High Court that "nobody" on behalf of the DCC group or its subsidiary Lotus Green Ltd negotiated the €106 million sale of the DCC stake in Fyffes over three days in February 2000.
DCC also took no view on the best way to get the best price for the stock, and he himself had acted only as a conduit between brokers and Lotus Green, he said.
Mr Flavin denied a suggestion by Paul Gallagher SC, for Fyffes, that he, Mr Flavin, was the only person who had had an input into the terms on which the shares were sold. He said the price for the shares had come from the stock market.
In his continuing cross-examination - which was adjourned at 2pm yesterday until today, after the court was told Mr Flavin was unwell - Mr Gallagher asked Mr Flavin, given his "vast experience" in business, whether it was normal for a person to continue contacts about the sale of a very substantial shareholding in a company without some authority from that company. Mr Flavin said he just passed on approaches from brokers as they were made to him and did not negotiate.
Mr Flavin said negotiations "don't always go on" in relation to stock market transactions. He said the stake was sold after the board of Lotus Green (a wholly owned Dutch-based subsidiary of DCC to which beneficial ownership of the DCC stake in Fyffes was transferred in 1995 in what Mr Flavin described as a proper and legitimate "tax planning" exercise) decided on February 3rd, 2000, to accept offers of €3 or more for the stake.
He agreed there was nothing in the minutes of the Lotus Green board's decision that day to indicate how the company was to get offers for the stake. He could only speculate that Lotus Green expected, as he expected, that he would get further calls from brokers that day which he would pass on to them. He agreed he had continued talking to brokers that day without anyone in Lotus Green telling him to do so. He said he was acting as "a conduit".
Mr Flavin said he had received "totally unsolicited" offers for the stake from brokers from late January 2000 and passed those offers on to Lotus Green. At the time, there was unprecedented demand for the Fyffes shares and they were trading at an unprecedented price.
He had discussed this with Fergal O'Dwyer, chief financial officer of DCC and the sole Irish-based director of Lotus Green, and Mr Flavin believed Lotus Green had decided to sit back and receive the unsolicited offers.
He believed Lotus Green took the view that €3 or more would be a very good price for the stake. He did not regard it as strange that Lotus Green made a decision about the price without ever asking him whether the price they decided was the best price they would get.
In the context of the then long-agreed DCC strategy to exit Fyffes, he believed the Lotus Green decision was a very rational, correct and proper one.
Mr Flavin said he had not negotiated with brokers and believed that, if he had, he would have secured a higher price than the €3.20 accepted by Lotus Green on the afternoon of February 3rd, 2000. He did not pass on to Lotus Green that belief because he had no authority to negotiate the price. He was very clear he should take no action which could suggest he was exercising any authority over Lotus Green. He said he was very divorced from the affairs of Lotus Green.
Yesterday was the 44th day of proceedings by Fyffes alleging "insider dealing" in connection with the sale of the DCC stake in Fyffes in February 2000. The claim is rejected by DCC, Mr Flavin and two DCC subsidiaries, Lotus Green and S&L Investments Ltd, who plead the sale was properly carried out by Lotus Green.
When the case was due to resume yesterday afternoon, Ms Justice Laffoy was told Mr Flavin was unwell and the hearing was adjourned to 11am today.
Earlier yesterday, Mr Gallagher asked Mr Flavin about a telephone call between Mr Flavin and stockbroker Ronan Godfrey on February 3rd, 2000, the day of the sale of the first tranche of the DCC stake. In one call, Mr Flavin was recorded as saying "...we have appointed you jointly now, so long as it is a joint, a joint placing...".
Mr Flavin agreed those were the words on the transcript but said they were not factually correct. He said he had used "very clumsy language" and had said those words in the context of his knowing there had been a joint approach by Davy and Goodbody stockbrokers for the DCC stake and that the brokers themselves had exclusively decided to work together. It was incorrect for him to have stated "we have appointed you jointly" and the words he used did not properly convey the reality.
He said words can have different meanings in different contexts and the word "placing" could have different meanings in stock market parlance. He said DCC had later issued a statement to the stock market about the February 3rd sale, which had correctly stated that Davy and Goodbody had placed the shares jointly.
Mr Flavin also agreed that when Tom Diepenhorst, a Dutch-based director of Lotus Green, had phoned Mr Godfrey on February 3rd, 2000, Mr Diepenhorst had given no explanation of what Lotus Green was. He also agreed Mr Diepenhorst had said: "How can we proceed? I confirm the transaction?" He agreed Mr Diepenhorst made no attempt to negotiate with Mr Godfrey regarding the share sale.
Mr Gallagher suggested that the lack of any negotiating by Mr Diepenhorst only made sense if Mr Diepenhorst knew that Mr Flavin had already negotiated the best terms possible. Mr Flavin disagreed. He said Mr Diepenhorst had earlier been designated by Lotus Green as the person to accept an offer if one was made.
Mr Flavin agreed that Roy Barrett of Goodbody's had phoned him on February 8th on two occasions about a further sale of Fyffes stock. He said the second call was a formal offer.
Asked why he had not referred Mr Barrett to Mr Diepenhorst at the time of Mr Barrett's first call, Mr Flavin said he maintained the position he had taken from the time he first began to receive unsolicited offers for the shares. This was that he would refer these on to Lotus Green only when a formal offer was made in order not to undermine Lotus Green's position and alert brokers that the stock was for sale.
Mr Gallagher said that rationale no longer applied on February 8th because, on February 3rd, the existence of Lotus Green was made known to Davy Stockbrokers. Mr Flavin said his rationale was that Mr Barrett may have been on a "fishing trip" on his first call and that it was not wise to pass him on to Lotus Green unless Mr Barrett was making an offer.
He said he had no instructions to pass on the offers, that was his own decision. He was reacting to events but he was very clear he had responsibility to pass on any offer, if received, to Lotus Green.
