Analysis: When the stockbrokers' compliance officer was out of the office, the deputy chairman had copies of a tape made, writes Colm Keena, Public Affairs Correspondent

The deputy chairman of Davy Stockbrokers, Mr Kyran McLaughlin, faxed transcripts of conversations at the heart of the Fyffes/DCC insider-dealing case to Mr Jim Flavin, chief executive of DCC, on December 3rd, 2001.

At the time, the Irish Stock Exchange and the Director of Public Prosecutions (DPP) were inquiring into alleged insider dealing by DCC involving shares in Fyffes.

The tape from which the transcript was made was locked in a safe in the office of the Davy compliance officer, Ms Pamela Downey. It was copied when she was out of the office for a number of days.

On her return, Ms Downey heard from her assistant that Mr McLaughlin had borrowed the tape for a short time. In the run-up to the court hearing now under way, Ms Downey learned that transcripts had been sent to Mr Flavin by Mr McLaughlin on December 3rd, 2001.

Davy was and is stockbroker to both DCC and Fyffes.

This disclosure of information flowing from Davy to Mr Flavin against a backdrop of the stock exchange/DPP inquiry into alleged insider dealing follows an earlier disclosure of information flowing from the exchange to Mr Flavin in relation to the same matter.

Documents disclosed as part of a Supreme Court appeal in January apparently record Mr Brian Davy, chairman of Davy Stockbrokers and deputy chairman of the exchange, relaying information concerning the insider-dealing inquiry to Mr Flavin.

The exchange requires stockbroking firms to keep tapes of trading conversations for three months. Davy retains copies of such tapes for up to six months, Ms Downey told the court.

The telephone lines of people involved in trading are taped onto a mastertape that can record thousands of calls. Each mastertape usually contains calls for a period of about two months.

When Davy was contacted by the exchange on September 1st, 2000, it still had a mastertape of conversations from February 3rd, 2000. Ms Downey, who took up her new position in September 2000, had a member of staff listen to the mastertape and record all conversations on February 3rd concerning the DCC sale.

The recording from the mastertape was made with a dictaphone machine. The mastertape was not retained and no longer exists, so relevant conversations that may have been taped prior to February 3rd, if they ever existed, no longer exist.

On September 15th, 2000, Ms Downey responded to the questions asked by the exchange but did not mention the tapes because she had not been asked about tapes.

A CD recording made from the dictaphone recording of conversations between Mr Flavin and Mr Ronan Godfrey, head of the equity desk at Davy, was played to the court yesterday.

The sound quality was at times poor, similar, perhaps, to a poor recording of contacts between a space shuttle and mission control. To continue with the analogy, Mr Flavin sounded like the astronaut, the man with nerves of steel who had his hands on the controls, while Mr Godfrey was the man on the ground, pushing for all he was worth to get the best out of the mission and land the deal.

The importance of the tapes relates to the issue of who exactly had control over DCC's stake in Fyffes. DCC says its Dutch subsidiary, Lotus Green, actually dealt in the shares on February 3rd. Fyffes alleges Mr Flavin, and DCC, dealt in the shares.

The tape records four conversations with Mr Flavin. In the third call, Mr Godfrey makes a formal bid for 17.89 million Fyffes shares at €3.20 a share. Mr Flavin says he'll get back as soon as he can, then continues: "It may, Ronan, it may be that you get a call not from me but from a guy from ING Bank in Holland, Tom Diepenhorst, and if it's not him you can take it that they have authority to give an instruction."

Mr Godfrey: "Fine. That's no problem."

Mr Flavin: "I have no authority in the matter."

At the end of that sentence, Mr Flavin can be heard to laugh.

Mr Diepenhorst then rings Mr Godfrey and confirms the deal.

The dictaphone tape also includes conversations between Mr Godfrey and Mr Bruce Ashmore of Goodbody, who were also involved in the deal. These are to be played at a later date.