Deal was not encouraged

Fyffes chief executive Mr David McCann has told the High Court that "in no way" did Fyffes encourage director Mr Jim Flavin to "deal" in Fyffes shares in February 2000.

"If Mr Flavin chose to commit a crime, that was a matter for him," Mr McCann said yesterday.

Mr McCann said that the "gigantic amount" of information Mr Flavin had "when he dealt" in the shares was "clearly price-sensitive".

Mr Flavin "always held himself out to be a champion of corporate governance" and "knows what he did... He didn't need to be told by us about corporate governance". He added that the parting between Fyffes and Mr Flavin, who is chief executive of DCC, was "not a good parting".

Mr McCann was responding to suggestions by Mr Kevin Feeney SC that, as a "human" whose father had worked with Mr Flavin for 20 years, if Mr McCann truly believed that Mr Flavin had price-sensitive information at the time of a controversial share deal on February 3rd, 2000 (when DCC sold half of its shareholding in Fyffes), then Mr McCann had a moral responsibility to tell Mr Flavin so before two further share deals on February 8th and 14th, 2000.

Mr McCann said it was "plain as day" on February 3rd, 2000 that Mr Flavin was leaving Fyffes and "his decisions were for him".

He said Fyffes had addressed the issue of whether Mr Flavin had price-sensitive information about August or September 2000. Up to then, he said, the company's executives did not realise they had a remedy under the Companies Act.

He could not remember when Fyffes had first discussed the issue of whether Mr Flavin had price-sensitive information. He imagined it was "plain as day" but, to some extent, "so what", he said. He imagined Fyffes discussed it often but the issue of what they would do was not considered. It was only some time later they realised they had a cause of action, he said.

Mr Feeney suggested the action brought by Fyffes against DCC and Mr Flavin was about the possibility of damages. Mr McCann said that if there was no remedy, "we would not be here".

Mr Feeney also suggested that several documents, including a report by Fyffes finance director Mr Frank Gernon and minutes of board meetings, showed that the Fyffes board did not decide until the week beginning March 6th, 2000 that the company would not meet its budgeted targets for 2000. Up to then, counsel suggested, it was clear from the documents that the general expectation of Fyffes was that the shortfall in the first months of 2000 would be recovered.

In those circumstances, Mr Feeney suggested, Mr Flavin could not have had price-sensitive information because he only had access to the same information which was available to the Fyffes board on December 9th, 2000, which information, he said, showed Fyffes still believed it could meet its targets. To argue otherwise was to rewrite history, counsel said.

Mr McCann rejected those suggestions. He said, if Fyffes had information on December 9th that it would not meet budgeted targets for 2000, Mr Flavin would have been the first person to put his hand up and say a profit warning should be issued immediately.

Mr Feeney said that in the wake of the profit warning issued on March 20th, 2000, Fyffes had been asked to produce a list of persons who had known prior to that date that the company would not meet its previous year's half-year result.

Mr McCann said the belief that it would not meet its half-year figure was arrived at around March 6th. However, he said he believed Fyffes had drafted a list of who knew beforehand that Fyffes was to issue a profit warning.