Taxpayers may end up footing €1.4m bill

THE taxpayer could well be stuck with the €1.4 million bill from the just completed High Court investigation into the alleged DCC/Fyffes insider trading case.

The Office of the Director of Corporate Enforcement (ODCE) – at whose behest the investigation was undertaken – said yesterday that the determination of how the costs will be paid is likely to take a number of weeks.

The Department of Enterprise, Trade and Employment will ultimately deal with the cost issue and how to recover it, post payment.

High Court inspector Bill Shipsey was put in charge of the investigation into how DCC acted when selling its stake in Fyffes in the late 1990s up to 2000.

The multi-disciplined holding company and support services business, which has interests in the energy, environmental, IT and food sectors, had, at one stage, a 20%-plus stake in Fyffes spread across itself and two subsidiaries in Lotus Green and S&L Investments, and ended up making €106m upon selling its total shareholding in two tranches. That was in early 2000, just prior to Fyffes issuing a profit warning.

The fruit distributor then launched legal proceedings against DCC, its two subsidiaries and then group chief, Jim Flavin, claiming insider knowledge/dealing led to the decision to sell up.

Although the initial High Court judgment of December 2005 found in DCC’s favour, that was overturned by the Supreme Court in 2007; whereupon DCC had to pay Fyffes €42m in damages and legal fees.

Despite the Supreme Court putting the decision on whether or not any directors should be disqualified back in the control of the High Court, Mr Flavin resigned in May 2008, two months before inspector Bill Shipsey’s investigation began.

The result of that 18 month investigation – basically finding DCC not guilty of any serious wrongdoing or company law breaches in its dealings and that no further action by the ODCE will be forthcoming – was welcomed by DCC, yesterday.