December date for DCC insider trading report

THE inspector investigating unlawful insider dealing by DCC and its former chief executive Jim Flavin relating to the sale of the DCC stake in Fyffes will present his final report in December.

Inspector Bill Shipsey SC told the High Court he plans to give the companies and 18 relevant individuals whom he has interviewed copies in September of any adverse findings he proposes to make so they have an opportunity to respond before he finalised his report in December.

Mr Shipsey has also indicated his intention to make general recommendations in his final report relating to the corporate responsibility obligations of companies and their directors, officers and advisors.

Mr Justice Peter Kelly received Mr Shipsey’s second interim report but refused an application by Jim Breslin, for the inspector, to extend time to January next for the final report. The judge directed the final report be presented by December 21.

Mr Justice Kelly appointed Mr Shipsey in late July 2008 after finding circumstances suggesting unlawfulness in the conduct of DCC’s affairs relating to the 1995 transfer of the DCC stake in Fyffes and/or the sale of that Fyffes stake in early 2000.

The appointment of an inspector to DCC and subsidiaries S&L Investments and Lotus Green was sought by the Director of Corporate Enforcement Paul Appleby following the 2007 Supreme Court finding of unlawful insider dealing by DCC and Mr Flavin in the €106 million sale of the DCC stake in Fyffes in 2000. The application was the director’s first ever.

An inspector’s report could provide the basis for disqualification proceedings against persons involved in the 2000 share sales or in the 1995 transfer of DCC’s Fyffes stake to Lotus Green. The inspector is empowered to examine whether there were breaches of the Companies Act by the officers and directors, including shadow directors, of DCC and its servants or agents.

When appointing the inspector, Mr Justice Kelly said he had to bear in mind the activities in question gave rise to court findings and ultimately resulted in DCC paying Fyffes more than €37 million in damages.

DCC had conceded there was evidence, in relation to the 1995 transfer of the Fyffes stake to Lotus Green, suggesting a breach of the statutory provisions on notification requirements but has denied any breach of the insider dealing provisions relating to either the events of 1995 or 2000.