DCC guilty of insider trading

DCC could face fresh claims for damages following the Supreme Court’s ruling that it had engaged in insider dealing in Fyffes shares.

Several other claims were launched in 2002 following the initial Fyffes action against DCC. Investors who purchased these shares were at a significant loss following a profit warning from Fyffes a month later.

The High Court will hear Fyffes’ claim for compensation in October.

The company could seek up to €85 million, which is the total profit DCC made when it sold off its 10% stake in Fyffes.

However, legal industry sources expect the compensation figure to be lower. DCC has put a €50m figure on its total liability, which includes the €25m legal bill for the entire case.

Sources have suggested that investors who purchased Fyffes shares from DCC could seek a share of any compensation received by Fyffes.

Shares in Fyffes rose by 5.5% to close at 84 cents.

The company said: “The board of Fyffes is pleased that its Supreme Court appeal has been successful and that the five judges of the court found, unanimously, that the trading information in Mr Flavin’s possession when he dealt in Fyffes shares in early 2000 was price sensitive”.

Shares in DCC slid 3.25% to 21 yesterday. The board of DCC said it had full confidence in Mr Flavin’s role following the ruling. He had always maintained that he was not in possession of price sensitive information when DCC, through its Dutch subsidiary Lotus Green, sold off its stake in Fyffes over three days in February 2000.

DCC said last night: “In allowing the appeal, the Supreme Court judgement did not affect the High Court’s finding that the sale of the shares by the DCC Group was not in any way motivated by the information relating to Fyffes which was in the possession of Jim Flavin and that, accordingly, the sale did not involve any use of that information.”

The case is likely to end up as one of the longest-running and costliest in Irish legal history.

The High Court hearing began in December 2004 and lasted 87 days. The judgement by Ms Justice Mary Laffoy ran to 367 pages.

The final figure on compensation and the allocation of costs will be decided by the High Court later this year.