THE BOARD of DCC is likely to discuss next week a statement from the Irish Association of Investment Managers (IAIM) that the company's founder, Jim Flavin, should not continue as executive chairman due to a Supreme Court ruling that he engaged in illegal insider trading.
There was no comment yesterday from DCC on any aspect of the IAIM statement on Thursday evening, which prompted considerable speculation in business circles about Mr Flavin's prospects of staying in office until his scheduled retirement in July 2010.
Shares in DCC closed six cent weaker last night at €15.84 in a downbeat market after rising nine cent to €15.99 at one point in morning trading.
Many close observers believe it will be difficult for Mr Flavin to survive following the statement. However, there is no sign that any of DCC's non-executive directors are reconsidering or plan to reconsider their support for Mr Flavin.
The board has reiterated its unanimous backing for him on four occasions since the Supreme Court found that he held inside information on Fyffes when selling DCC's stake in that business in 2000.
The sale, which realised a profit of some €85 million for DCC, was executed not long before Fyffes issued a profit warning.
A number of sources said certain members of the investment community were disappointed that DCC's senior independent director, Michael Buckley, has not been able to find a solution to the issue.
A former chief of AIB, Mr Buckley conducted DCC's engagement with the IAIM after the Supreme Court ruling last summer. It is his job to engage with shareholders who have concerns that cannot be addressed through the executive chairman.
Some sources say they had hoped Mr Buckley would have been able to resolve the questions over Mr Flavin's leadership before this year's agm. A DCC spokesman had no comment.
Bank of Ireland said the chief of its IBI Corporate Finance subsidiary, Róisín Brennan, had a place on the DCC board in a "personal capacity" when asked whether the IAIM statement raised any issues for the bank or Ms Brennan. The bank's investment unit, Bank of Ireland Asset Management, is a member of IAIM and its 8 per cent stake in DCC makes it one of that company's largest Irish investors.
"We don't have anything to add to what we said before, which is to reiterate that Róisín is a non-executive director of DCC in a personal capacity and the bank has no further comment," said the chief spokesman of Bank of Ireland.
US company Fidelity Investments, whose subsidiary FMR Corp is DCC's biggest shareholder with a 14 per cent stake, said its policy was not to comment on any of its investments.
