McCann claims Fyffes was 'set up' by broker

Fyffes chief executive Mr David McCann told the High Court yesterday that he believed the company was "set up" over a presentation to investors organised by Davy Stockbrokers.

He believed there was an arrangement between Davy and DCC for the purpose of selling DCC shares.

Mr McCann was under cross-examination on the twelfth day of an action by his company, Fyffes, alleging insider dealing by DCC and DCC's chief executive, Mr James Flavin. Fyffes is also suing S&L Investments, with an address at DCC House, Stillorgan, Co Dublin, and Lotus Green, a Dutch subsidiary of DCC that owned 10 per cent of Fyffes.

Fyffes claims the defendants had price-sensitive and confidential information regarding its trading performance at a time of the €106 million share deals, which yielded a profit of €85 million on February 3rd, 8th and 14th, 2000.

Mr Kevin Feeney SC, on behalf of DCC and Mr Flavin, yesterday asked Mr McCann about a Fyffes board meeting of June 30th, 2000. Mr McCann said it was specially called to review price movements in Fyffes's shares.

Mr Feeney referred to a "bullet" in the meeting agenda relating to "widespread coverage" of DCC's sale, and, in particular, a suggestion that Fyffes was somehow complicit in that transaction and that it had been a factor identified as affecting share pricing. Mr Feeney asked what was meant by "complicit"?

Mr McCann said that a lot of presentations made on the last few days of January and into early February by Fyffes were arranged for the purpose of placing DCC shares, and Fyffes did not know that at the time. These meetings would have been arranged by stockbroking houses in Dublin.

Fyffes had the impression that the fund managers thought it had actively been selling the shares on behalf of DCC and that Fyffes had not done anything about it.

Mr Feeney asked if it was correct that Fyffes was doing presentations towards the end of January among the Dublin investment community through stockbrokers. Mr McCann said it was largely one meeting organised by Davy Stockbrokers. He thought that was around January 30th or 31st.

Mr Feeney asked on whose behalf Davy organised that presentation. Mr McCann: "I think it is a matter we can debate. It think it was on behalf of DCC."

Mr Feeney: "Are you suggesting that Davy, together with DCC, somehow arranged a presentation for the purpose of selling DCC shares?" Mr McCann: "Whether that was formally discussed and agreed or not, that was what happened, in effect."

Mr Feeney: "Are you suggesting that Davy deliberately connived with DCC to give a presentation on Fyffes' behalf when they, Davy and DCC, both knew that the real purpose was, in fact, to benefit DCC?"

Mr McCann: "I think at that time it was my view that Davy and DCC were aware that the object of the exercise was to generate interest in Fyffes shares with a view to selling the DCC block of Fyffes shares."

Mr Feeney: "You're suggesting that they did that without telling you?" Mr McCann said Fyffes was "clearly" not told, and he believed Davy Stockbrokers was told by DCC not to tell Fyffes what was going on. He believed Fyffes was misled by Davy.

He claimed he was personally misled by Mr Ronan Godfrey in Davy, but he had not put this to Mr Godfrey.

Mr Feeney said these were serious suggestions: that a stockbroking firm, in suggesting that Fyffes give a presentation, would have a purpose other than the one that had been indicated to the company, and that Fyffes would have been deliberately and intentionally misled. Mr McCann said Fyffes had not put that to Davy.

Mr Feeney said that if Mr McCann were going to make such allegations, he would have inquired into it before making it. Mr McCann said he had not been planning on making the suggestion in court yesterday.

Mr Feeney asked if it was Mr McCann's view that, as of June/ July 2000, Davy had "set up" Mr McCann.

Mr McCann agreed, in the sense that he believed Fyffes was at those meetings for a purpose other than the reason they had understood. It was probably their belief soon after February 3rd, 2000.

Mr Feeney asked had Mr McCann or anybody ever taken the matter up with Davy. Mr McCann said he did not know the answer to that, but he had not.