DCC witness fails to recall sale details

The DCC executive responsible for regulatory matters has told the High Court that he cannot recall several aspects of the controversial €106 million sales of the DCC stake in Fyffes in February 2000 sales.

Michael Scholefield, DCC Compliance Officer from 1995 to 2000 and now managing director of DCC Corporate Finance, said he had not given the matter of who negotiated the share sales any thought.

He didn't recall what his thoughts might have been on February 3rd, 2000, (the date of the sale of the first tranche of the Fyffes shares) regarding the role of DCC chief executive Jim Flavin in that transaction.

Mr Scholefield agreed that he had prepared two draft stock exchange announcements regarding the sale on February 3rd, 2000, and had also prepared the final announcement sent to the exchange that same day.

He didn't recall sending the first draft to Fyffes at 12.48pm that day although it must have been him who sent it. He would have prepared that first draft, and the second draft, in conjunction with Mr Flavin.

He could not recall what he thought Mr Flavin was doing when they had discussions regarding the drafts.

He agreed that he must have realised at the time the drafts were prepared there was a prospect the Fyffes shares might be sold. He didn't believe when he sent the first draft to Fyffes that he had any knowledge of the state of Mr Flavin's discussions with brokers.

Asked whether it was likely, had Mr Flavin told him of receiving approaches from brokers, that Mr Scholefield would not have inquired about the price for the shares, Mr Scholefield said he believed that was quite likely because it was "not any of my business".

Asked whether it was likely brokers would be talking to Mr Flavin without prices being mentioned, Mr Scholefield said: "I really don't know."

Asked if it was likely Mr Scholefield would be asked to send through the draft announcement to Fyffes without any discussion on the price of the shares, he said: "I really don't know."

Mr Scholefield was being cross-examined by Brian Murray SC, for Fyffes, on the 60th day of proceedings by Fyffes alleging insider dealing in connection with the sale of the DCC stake in Fyffes over three days in February 2000.

The action is against DCC plc, Mr Flavin and two DCC subsidiaries - S&L Investments Ltd and Lotus Green Ltd. The defendants deny the claims and plead the sales were properly organised by Lotus, to which beneficial ownership of the Fyffes shares was transferred in 1995 for tax reasons.

Yesterday, Mr Scholefield said that his only role on February 3rd, 2000, regarding the share sales was preparation of the stock exchange announcements; discussion of regulatory matters arising with DCC chief financial officer Fergal O'Dwyer; a discussion with Alvin Price, a long-time legal adviser to DCC; and a discussion with Terry O'Driscoll, a tax partner with PricewaterhouseCoopers. He had also spoken with Ronan Godfrey of Davy Stockbrokers, either on February 3rd or 4th, 2000, in relation to settlement of the share transaction.

He had discussions with Mr Flavin regarding the share sales but he did not know how many discussions.

He did not remember having any discussions with Mr Flavin about the price of the shares or what the brokers were offering and did not believe he had had such discussions.

Asked was he saying he could not help the court as to whether, at any stage on February 3rd, Mr Flavin had mentioned any price that was being mentioned regarding the shares, Mr Scholefield said that was the position.

He agreed that he had had an input into a response by DCC in September 2000 to inquiries from the Irish Stock Exchange about the share sales. He agreed that response referred to Mr Flavin receiving "offers" from brokers prior to February 3rd. He said the response used "looser" language and the word "approaches" should have been used instead of offers.

Mr Murray suggested that Mr Scholefield seemed to have less difficulty in September 2000 recalling the events of February 3rd, 2000, than he now was having in court and asked whether Mr Scholefield had a lot of general information which he was not sharing with the court? Mr Scholefield said there were a lot of things happening on February 3rd, 2000, in which he was not involved and that he was unable to recall.

He said counsel had asked him very precise questions for which he had no reference points. He said DCC had not forensically reviewed every item included in its response to the stock exchange inquiries as was now happening in court.

Mr Murray asked whether it might be regarded as surprising that Mr Scholefield had such difficulty recalling an event described by Mr Flavin as all DCC's birthdays coming together. Mr Scholefield said it was really after the sale that there was a sense of a good event and "all our birthdays coming together". At the time, both Fyffes shares and DCC shares were rising. He did not have a particular recall of February 3rd, 2000, being an exceptional day.

He agreed that DCC had, later in 2000, sent a letter to Mr Kyran McLaughlin of Davy Stockbrokers relating to the share deals and containing suggested corrections to what Davy had told the exchange.

He said DCC had felt it was not treated fairly by the exchange's decision to refer a file regarding the sales to the DPP and, it was on that basis, DCC felt it should write to Davy's and ask it if it agreed with the points DCC was making, to "correct the record" with the exchange.

He denied DCC was telling Davy's the precise terms of corrections and said DCC was trying to be "generic" and was saying "this statement might not be correct" or "this might be a more factual response".

The case resumes on Tuesday before Ms Justice Laffoy with Mr Roy Barrett of Goodbody Stockbrokers beginning his evidence.