Fyffes statement justified, court told

An outlook statement by Fyffes to the market in December 1999, to the effect that 2000 would be a year of further growth, was an appropriate statement to make at the time, the High Court was told yesterday.

Fyffes chief executive Mr David McCann said he had concerns at the time that Fyffes would not meet its target for 2000, but did not think December 2000 was the correct time to make a statement concerning this to the market. He said the board had to make a "judgment call" on these matters at the time.

Asked by Mr Kevin Feeney SC, for DCC, Mr Jim Flavin and two DCC subsidiaries, whether the December outlook statement was "your true and realistic belief" at the time, Mr McCann said: "That's what we put out into the market on that date."

Asked if the market had been given accurate information at the time, Mr McCann said: "We gave the information we did. As I said, we had concerns at the time."

Mr McCann said that on December 14th, 1999 the board of Fyffes made an outlook statement to the market predicting that 2000 would be a year of "further growth".

He agreed that this meant the company would have to achieve profits greater than those achieved for 1999, involving profits of more than €85 million.

Mr McCann said they had concerns at the time about meeting that target, but his judgment then was that it was an appropriate statement to make to the market.

When repeatedly pressed by Mr Feeney as to whether it was a true statement to state that Fyffes expected "further" growth in 2000, Mr McCann said they had formed the view on December 14th that it was too early to tell the market of their concerns.

At the time, they had results for November 1999 (first month of the 2000 financial year), which showed a poor performance by Fyffes, and had a view that there would also be an underperformance in December 1999.

Mr Feeney suggested that if they had doubts that 2000 would be a year of further growth, they were misleading the market.

Mr McCann replied that they had made a judgment call. Mr Feeney said a forecast performance for January 2000 was available at the time. Mr McCann said he did not recall any information regarding the situation in January.

Mr Feeney suggested that Mr McCann wanted to resile from the outlook statement because of the consequences of it for Fyffes' claim that Mr Flavin had confidential information at the time of the share deals in February 2000.

He said Fyffes executives had the same information as Mr Flavin when they prepared that outlook statement.

Mr McCann said the information available to Mr Flavin in February 2000 was different from that available to the Fyffes board on December 9th, 1999.

Asked when he formed the view that Fyffes would not make increased profits in 2000, Mr McCann said his view as the company moved into January 2000 was that it needed to win two court cases in which it was involved, to meet the performance they were expecting.

Fyffes took the view in March that it was appropriate to tell the market they would not make the predicted profits for 2000.

Mr Feeney suggested that Mr McCann could not point to any document showing any consideration by the Fyffes board that the profits would not be made unless the court cases were won. He suggested that this was "a post-facto justification" to find a reason to explain why the market statement could be delayed until March.

Mr McCann said he concluded during January that Fyffes needed to win the legal cases to meet the half-year profit figures. He had a clear recollection of discussing this with his brother Carl.

Mr Feeney said information that the outlook for Fyffes in 2000 was dependent on court cases would be price-sensitive information. He said the Fyffes claim that Mr Flavin had price-sensitive information rested on two documents - management accounts for November 1999 and a summary trading document for December 1999.

Asked when Mr McCann had taken the view that this information was price sensitive, Mr McCann said he did so the moment Mr Flavin had those documents. He added that Mr Flavin had price-sensitive information "perhaps a long time before that".