Investors angry following Fyffes profit warning

Investors "complained bitterly" to Goodbody brokers when Fyffes issued a profit warning within weeks of €106 million being invested in the company, the High Court heard yesterday.

The company's share price fell by almost 25 per cent over two days after the profit warning on March 20th, 2000. During February, Goodbody and Davy stockbrokers were involved in placing Fyffes shares worth €106 million with a range of investors. The shares were sold by DCC plc.

Goodbody asked that senior executives in the Dublin-based multinational fruit distributor make calls to shareholders who had just invested in the company.

Fyffes chairman Mr Carl McCann told the court he could recall one particularly negative conversation with a fund manager in Denver. "She was very annoyed, very upset," Mr McCann said. "She was complaining that the share price had gone down and she'd lost a lot of money."

Mr McCann was giving evidence in the ongoing case where Fyffes is alleging insider dealing by DCC and its chief executive, Mr Jim Flavin. The profit warning was issued by Fyffes on the day of its agm.

At the time Goodbody stockbrokers was involved in trying to raise finance for Fyffe's worldoffruit.com project.

Mr McCann said that on March 20th, Mr Liam Igoe, a food analyst at Goodbody, "looked as white as a ghost. He was very shocked at what had happened." He said senior figures from Goodbody contacted Fyffes and were "very negative".

The broker said Fyffes needed to contact all the investors and "say something to them". It did call a number of the investors and "did get a very negative reaction", he said. "This was deadly serious stuff. This affected everybody," Mr McCann said.

He said the stock exchange can be "a cruel place". It decided within "two seconds" of the profit warning that this was "bad news". Mr Igoe had been bullish about Fyffes in January 2000 and was "a most upset man" on March 20th.

The court heard that Mr Kyran McLaughlin of Davy will dispute an internal Fyffes memo allegedly recording him saying Mr Flavin initiated the February 2000 sale of Fyffes shares.

Mr McCann said the issue was open to interpretation. "At a dance you might wonder who made the first move, was it the girl who made eyes at somebody, or the guy who came over".