Court best option for DCC inquiry- Appleby

The official enforcer of corporate law Paul Appleby has said that the appointment of High Court inspectors to investigate how DCC sold a major stake in fruit importer Fyffes “offers the best prospect” of satisfactorily addressing all matters of concern.

At a press conference in Dublin today, following the resignation of DCC founder Jim Flavin from the role of executive chairman last night, Mr Appleby said if inspectors were appointed by the court he expected their work to last for approximately 12 months and that he would request regular updates by the inspectors to the court.

Speaking to RTÉ radio news Mr Appleby said he had decided that a "thorough High Court inspection should take place of those transactions with a view to getting the full picture and identifying the relevant responsibilities and roles of people who were associated with the transactions in question.”

A factor in his decision to apply for a High Court inspection was the upholding of corporate governance standards. “I think things have improved dramatically and in order to maintain those sort of standards it is essential that the type of action that I have taken in this case and indeed in any other case where serious misconduct is suspected, that action is taken to call the people to account.”

In a statement released earlier Mr Appleby said it was his considered view that an investigation by his office would “face substantial difficulties in acquiring a standard of evidence sufficient to ground any future enforcement proceedings.”

“Against this background, I have decided recently that a High Court inspection offers the best prospect at this stage of properly investigating the issues which require attention," Mr Appleby said.

"This has been used successfully in the past, and I am optimistic that such a course of action, if sanctioned by the Court, would satisfactorily address all of the matters of concern”, he added at a press conference in Dublin where he also published the ODCE’s annual report.

Mr Appleby yesterday made an ex parte application to the High Court to have inspectors appointed to DCC and its subsidiaries, Lotus Green and S&L Investments. The application is due to be heard on June 9th.

“If inspectors come to be appointed by the High Court, they will report back to the Court in due course. On receipt of a final report, I will determine if there are sufficient grounds to justify taking action against anyone who may be criticised in it,” Mr Appleby said.

He concluded by adding that as the matter is now sub judice, he would not be making any comment on the statements issued by the board of DCC and the Irish Association of Investment Managers last week.

It is understood that the DCC board convened an emergency meeting yesterday following notification of the application by Mr Appleby to the High Court.

Last night, DCC said Mr Flavin resigned because in the interests of the company and, “due to the continuing uncertainty arising from the outcome of the litigation” with Fyffes.

"While I am resigning, I firmly hold the view that I have always acted honourably and in what I believe to be the best interests of the company and all its shareholders," Mr Flavin told the board.

DCC, a distributor of goods from computer games to health foods and gas, agreed in April to pay Fyffes and investors €41 million ($64 million) after a court last year said Mr Flavin had market sensitive information when he sold Fyffes shares in 2000.

Mr Flavin was a Fyffes director at the time of the share sale from which DCC made a €85 million-euro profit. That created discord between two of Ireland's best-known companies prompting Fyffes to sue DCC.

Last week the Irish Association of Investment Managers said it wasn't appropriate that Mr Flavin remain as executive chairman.

Former AIB chief executive Michael Buckley has been appointed former as non-executive chairman with immediate effect. DCC managing director Tommy Breen has been appointed chief executive with immediate effect.