Fyffes statement was 'not accurate'

A statement issued to the stock exchange by Fyffes in December 1999 was neither complete nor accurate, the company's chief executive told the High Court yesterday.

Mr David McCann said the company had made a judgment on December 14th, 1999 not to voice its concerns about its trading performance in the first quarter of the financial year beginning November 1st, 1999.

It issued a statement saying it expected further growth in the financial year 2000.

Mr McCann said the statement by Fyffes to the stock market on December 14th, 1999 in relation to its outlook for the financial year 2000 was neither accurate nor complete. He said that, "in the context of our judgment, we provide appropriate information".

"Is it accurate or complete? No, it's not accurate or complete... We do our best to comply with the rules of the market."

When Fyffes made its statement alongside the company's results for the financial year to October 31st, 1999 and predicted "further" growth for the company in 2000, it did not explain its trading difficulties, Mr McCann said.

It was for others to judge whether what the company did falls within certain auditing standards, he added.

"The market would understand we exercise judgment about what we put into the market and, in many instances, a company would have price-sensitive information that it would not put into the market," he said.

Asked by Mr Feeney whether Mr McCann was "seriously suggesting that", Mr McCann replied: "Absolutely, yes. I think the market would expect companies to exercise judgment about what it said in its statements."

He said the December 14th statement did not refer to the underlying poor performance of Fyffes in 1999 and that omission resulted in a weakness in virtually every statement in the report. That omission affected every bit of the statement in terms of accuracy.

The cross-examination of Mr McCann continued yesterday, the 10th day of proceedings by Fyffes alleging that DCC plc and Mr Flavin organised three share deals in February 2000 in a manner which breached "insider dealing" provisions of the Companies Act.

The shares in Fyffes were sold for €106 million and yielded a profit of €85 million.

The action is against DCC plc, Mr Flavin and two DCC subsidiaries, S & L Investments and Lotus Green Limited. The defendants deny the claims, plead that Lotus Green dealt legitimately in the shares and that Mr Flavin had no involvement other than to pass on unsolicited bids to Lotus Green.

Yesterday, Mr Feeney outlined regulations relating to presentation of results by listed companies to the stock exchange.

He referred to a document outlining standards and guidelines for auditors, which referred to the importance of preliminary results announcements by companies to the market.

Mr McCann said Fyffes used its preliminary announcement to give information which it judged to be appropriate.

Mr Feeney asked if Mr McCann understood that the regulations meant company directors should not hold anything back which could alter their auditors' view of what was being announced to the market.

Mr McCann said he understood directors must "exercise our judgment" regarding what information they put into the market and that must act as "a qualification".

He said he would be fairly confident that Fyffes' auditors, KPMG, would have seen the whole preliminary results package before it was announced to the market on December 14th, 1999.

The hearing resumes on Tuesday before Ms Justice Laffoy.