High Court hears DCC was 'calling the shots' in sale of Fyffes shares

DCC was "calling the shots" and making the decisions about how its Dutch-registered subsidiary, Lotus Green, proceeded in connection with the €106 million sale of the DCC stake in Fyffes in February 2000, the High Court was told yesterday.

"Everything that happened in Lotus Green went through DCC House," Brian Murray SC, for Fyffes, contended in closing legal submissions in Fyffes' action alleging insider dealing in relation to the share sales.

The action is against DCC, its chief executive Jim Flavin, and two DCC subsidiaries - Lotus Green and S&L Investments. The defendants deny insider dealing.

On the 81st day of the hearing yesterday, Mr Murray said it was Fyffes' case that Lotus Green, a Dutch-registered subsidiary to which beneficial ownership of the DCC stake in Fyffes was transferred in 1995 for tax purposes, complied, from its inception, with all directions of DCC in relation to the Fyffes shares.

Mr Murray said the evidence heard by the court was consistent with Mr Flavin exercising, as part of a pattern dating back to the inception of Lotus, a monitoring role over everything that was happening in relation to the shares.

Mr Murray argued that Lotus was established by DCC to do one thing - hold the DCC shares in Fyffes. What it had to do with the shares "was predetermined" by DCC.

He said that Lotus could have been set up in such a way that it did not have DCC's chief financial officer, Fergal O'Dwyer, as a director, did not do its administration from DCC house and did not have the contents of its board meetings decided from DCC.

However, that was not what had happened because DCC wanted to keep control, he said. It had that control through Mr O'Dwyer reporting to Mr Flavin and because of the system whereby there were A and B directors of Lotus Green and, most importantly, because everything that happened in Lotus Green went through DCC House in Dublin.

Mr Murray argued that a corporate body may be a shadow director of a company. In this case, Fyffes was contending that both DCC and Mr Flavin were shadow directors of Lotus Green.

He said a "fixation" within DCC with documents and the admitted fact that documents were brought into being to record things that simply did not happen or give a misleading impression of things that did demonstrated in a very general way that this was a situation "which is ripe for a shadow directorship".

The case resumes before Ms Justice Mary Laffoy on Monday.