Court date set for DCC insider dealing compensation hearing

A HEARING to decide what compensation must be paid by DCC plc to fruit distributor Fyffes and institutional investors over insider dealing by DCC chief executive Jim Flavin in the sale of the DCC stake in Fyffes in early 2000 has been fixed by the High Court for June 17 next.

The compensation hearing is expected to be the final stage in the legal battle between DCC and Fyffes, which resulted in a Supreme Court decision last July that Mr Flavin engaged in insider dealing when he sold the DCC stake in Fyffes on three dates in February 2000.

The Director of Corporate Enforcement may also ask the High Court to consider making disqualification orders arising from the case. This was indicated to the Supreme Court late last year when that court was making final orders arising from its judgment on the case, the first major insider dealing case here.

In an affidavit to the Supreme Court, the director, Paul Appleby, said he would be concerned “if any persons who actively participated in insider dealing transactions should be able to continue to discharge leading roles in Irish corporate affairs”.

Among issues which may need to be addressed were the support other senior people in the DCC group gave to insider dealing transactions and Fyffes’ own conduct, including the granting of share options to some individuals in January 2000 when, the Supreme Court found, it had price sensitive information, Mr Appleby said.

The Supreme Court, last July, found that the share sales in early 2000 breached the insider dealing provisions of the Companies Act and directed that the High Court decide DCC’s liability to Fyffes and others in light of the insider dealing finding.

Fyffes has argued it is entitled to some €85 million from DCC over the share sales, while DCC insisted that its aggregate liability, inclusive of legal costs, is closer to €50m. Some 20% of institutional investors have also sued DCC over the share sales in proceedings brought in the wake of Fyffes’ action.

Last November the Supreme Court declined an application on behalf of the Director of Corporate Enforcement to consider disqualification orders under Section 160 of the Companies Act 1990.

The Supreme Court said any such motion was for the High Court and the Supreme Court would in those circumstances dismiss the director’s application.