DCC chief executive Jim Flavin told Dublin’s High Court that the company never believed Fyffes could be serious about bringing legal proceedings over the sale of DCC’s shareholding in Fyffes.
Flavin is undergoing cross-examination in the ongoing insider dealing case brought by Fyffes..
According to a report in the Irish Times, DCC, Flavin and two DCC subsidiaries - S&L Investments Ltd and Lotus Green - deny the claims and plead that the share sales were properly carried out by Lotus Green.
The court has been told that, for tax reasons, the beneficial ownership of the DCC stake in Fyffes was transferred to Lotus Green in 1995.
Paul Gallagher SC for Fyffes said Flavin had already told the court that Lotus Green was dependent on publicly available information with regard to the Fyffes' shareholding.
Flavin replied that Lotus Green never had any unpublished information and no trading results except that Fergal O'Dwyer, DCC's chief financial officer, would have had trading results up to April 1996.
Gallagher said that it would make it all the more important if Lotus Green was to seriously consider the disposal of its Fyffes shareholding that it would have up-to-date information.
Flavin replied that, from 1995 onwards, with the exception of directors' fees, he was "totally remote" from Lotus Green.
Gallagher said this would mean that the Lotus Green board of directors did not have information concerning the difficulties in the banana market in the latter part of 1999. Flavin said that he did not know what information the board had.
Gallagher asked if it surprised Flavin that a board could make a decision to sell its sole asset worth in excess of €100 million without getting any brokers' commentaries on earnings or share prices?
Flavin said that this was a unique set of circumstances in that a share price, which had been recognised by the market as being somewhat undervalued for all of the 1990s, and that suddenly took off.
In the space of eight weeks, its share value rose by 133 per cent, from €1.60-1.65 to €4.
The case continues.
