THE DIRECTOR of Corporate Enforcement has reminded the High Court it can of its own volition make disqualification orders following the Supreme Court finding of unlawful insider dealing by DCC chief executive Jim Flavin in the sale of the DCC stake in fruit distributor Fyffes in early 2000.
Disqualification orders, made under section 160 of the Companies Act, restrain a person for a specified time from involvement in the management of any company on grounds of unfitness.
Brian O'Moore SC, for the director, said yesterday the matter of section 160 orders had been "avoided" by both Fyffes and DCC in their action to date.
The director was, "with deference", now taking the step of reminding the court it could of its own motion make section 160 orders because it was "too much of a risk" that the section 160 issue might not be to the forefront of the court's mind when dealing on June 17th next with the final stage of proceedings between Fyffes and DCC. Those proceedings, listed for June 17th, are to assess the amount of compensation to be paid to Fyffes and institutional investors over the insider dealing.
Mr O'Moore said the director had moved because of his "acute concern" about the serious issue of insider dealing and because the case was very significant for corporate governance. The director had a unique responsibility to ensure compliance with the Companies Acts. He had consciously not set out those people whom he believes are open for disqualification because he believed the court should not be prompted by submissions in that regard, counsel said. However, the director would gladly compile a list of people if the court wished and, if matters reached that stage, such people would be entitled to respond. It would be very onerous and costly for the director to bring a freestanding application to disqualify one or more persons, counsel added.
The director was not "at this stage" pressing to be joined to the June case but, if the court decided to address the section 160 issue, it was open to the court to join the director at that stage to the case as an amicus curiae (assistant to the court on legal issues). Counsel said the court, given the Supreme Court's finding of insider dealing, was entitled to make disqualification orders even if the case settles.
The director, Paul Appleby, has said in an affidavit he would be concerned "if any persons who actively participated in insider dealing transactions should be able to continue to discharge leading roles in Irish corporate affairs".
