Judgment reserved as Fyffes trial ends

THE legal action by Fyffes plc alleging insider dealing in connection with the €106 million sale of the DCC stake in the fruit distributor concluded at the High Court yesterday.

Ms Justice Mary Laffoy reserved judgment.

While the judge gave no indication when she would deliver her decision, it is anticipated it will be issued late this year.

The case opened late last year and ran for 87 days, hearing evidence from senior executives and directors of both firms and experts on a range of issues, including financial markets.

The evidence concluded last month and legal submissions were delivered from July 5 last, concluding with the closing reply yesterday from Paul Gallagher SC, for Fyffes.

The case arises as a result of the sales, over three days in February 2000, of the DCC stake in Fyffes. The court has been told the sales yielded €85m profit for DCC. The action was brought against DCC plc, its chief executive, Jim Flavin and two DCC subsidiaries S&L Investments Ltd and Lotus Green Ltd.

The defendants denied insider dealing and pleaded the sales were properly organised by Lotus, a Dutch-registered subsidiary.

Beneficial ownership of the Fyffes shares was transferred to Lotus in 1995 with a view to avoiding the payment of Capital Gains Tax on any subsequent sale of the shares.

The essential issues to be decided in the case are, firstly, if Mr Flavin 'dealt' in the shares within the meaning of the relevant provisions of the Companies Act and, secondly, whether information available to him prior to the sales was price sensitive.

Yesterday, Mr Gallagher said Mr Flavin had played a role in the share deals that went beyond anything that would entitle him to avail of the narrow exemption to the insider dealing provisions of the Companies Act.

It was inconceivable that the people involved in the sales did not regard the fact that Mr Flavin was dealing with the brokers and coming up with the offer as implict advice that this was acceptable to Lotus, he said.

He said Mr Flavin's role in getting Goodbody and Davy stockbrokers to make an offer to Lotus that was capable of acceptance "involves a dealing".

"Mr Flavin was clearly acting on behalf of DCC and DCC were involved from the very beginning of this and not just in terms of the execution," he added.

Kevin Feeney SC, for DCC, said his side had some unease that, on the very last day of the hearing, new or extended interpretations on facts and documents were being urged.

He hoped the court would take that into account.

Ms Justice Laffoy said : "It may come as no surprise that I am going to reserve judgment."

Mr Feeney and Mr Gallagher thanked the judge for her conduct of the trial.