Laffoy delivers Fyffes-DCC judgment

Judgment in the mammoth Fyffes-DCC insider dealing case is to be delivered today by Ms Justice Mary Laffoy. The judgment, reportedly 350 pages, may be given out in CD form, according to some sources, with the judge making accompanying remarks.

In the case, Fyffes alleged insider dealing against DCC, two of DCC's subsidiaries and its founder and managing director, Jim Flavin. The defendants have rejected the charge.

The case was heard on 87 sitting days between December 2004 and July of this year. Legal costs for whoever loses the case are expected to be in excess of €10 million. An appeal is considered inevitable.

During the hearing the court was told the case centred on two key questions: was information Mr Flavin possessed in February 2000 price-sensitive? And did Mr Flavin deal?

The defendants said the answer to both questions was no.

Mr Flavin was a non-executive director of Fyffes in February 2000 when DCC sold shares in Fyffes worth €106 million, making a profit of €85 million. In March 2000, Fyffes issued a profit warning and the share price dropped 25 per cent.

On dates in January 2000, Mr Flavin and the other members of the Fyffes board were sent the company's trading statements for November and December 1999, the first two months of the company's trading year.

Fyffes had pleased the market with its results for 1999 and, when making its interim announcement in December 1999, it said it expected further growth in 2000. In fact the company was experiencing trading difficulties.

The two trading statements sent to the directors revealed that, by the end of December 1999, the company had made a loss of €4 million compared to a profit of €4.9 million the previous year. The commentary accompanying the results blamed a price war between multiples in Britain, a key market for Fyffes.

Furthermore, the December trading statement included a forecast for January of a profit of €1.3 million, compared to a prior year profit of €6.3 million.

Mr Flavin and the other defendants said that, if Fyffes had truly believed this was price-sensitive information, it would have issued a profit warning in January rather than in March.

"They are expecting and asking and demanding of Mr Flavin an approach which is utterly opposite to the one which they themselves took and that is a cancer, we say, at the core of the case," said Kevin Feeney SC, for the defendants.

Mr Flavin said he did not deal in the shares and that the decision to sell was made by a Dutch-resident DCC subsidiary, Lotus Green. During the hearing tapes were played of Mr Flavin discussing a potential sale with Ronan Godfrey of Davy Stockbrokers.

At one stage Mr Flavin says: "I have no authority in the matter." He can then be heard to laugh.