The former managing director of Dunloe Ewart instructed his stockbroker in April 1997 to sell his Dunloe shares for "not less than 34p", Dublin Circuit Criminal Court has heard. Mr Dermot Walsh, former head of investments at Davy Stockbrokers, told the court on day seven of the State's first insider trading case, that Mr Philip Byrne gave him the instructions on April 28th, 1997 after a routine review of his share portfolio.

Mr Byrne (44), of Trafalgar Terrace, Monkstown, has pleaded not guilty to two counts of insider dealing contrary to the Companies Act, 1990.

It is alleged that Mr Byrne sold 260,000 of his 750,000 shares in Dunloe House (now Dunloe Ewart) between April 27th and May 9th, 1997, knowing their price was coming down.

Mr Byrne bought his shares three years previously for 10p each and the prosecution claims he had price-sensitive information as a director of Aviette, a company owned by solicitor Mr Noel Smyth which was his vehicle for a proposed merger with Monarch Properties to create the Cradder Group. Dunloe was then to perform a reverse takeover of Cradder.

Mr Walsh told Mr George Birmingham SC, prosecuting, that Mr Byrne was an advisory client of Davy at the time, and had a share portfolio worth about £1.8 million (€2.3 million). Dunloe shares made up 15 per cent of the total portfolio and accounted for 27 per cent of his equity portfolio.

Mr Walsh said transactions were discussed at the review meeting, including the sale of Mr Byrne's shares in United Drug, Abbey and others.

No decision regarding his Dunloe shares was taken, and Mr Byrne did not tell him he had been made a Dunloe director. Three days later, on April 28th, 1997, he rang Mr Walsh asking him to sell 250,000 of his Dunloe shares as well as some of his Smurfit shares. Davy made the transactions within about a week.

The £88,706.78 from the transactions was kept on deposit for Mr Byrne until it was used to buy back Dunloe shares for him months later.

Mr Walsh agreed with Mr Paul Gallagher SC, defending, in cross-examination, that when he noticed Mr Byrne's portfolio was overweight with Dunloe shares, he would have advised him to sell some.

It was usual for Davy to advise clients not to "keep too many eggs in one basket". He also agreed with Mr Gallagher that Mr Byrne bought back Dunloe shares only in September 1997, after he was made a director of the company, which was "a usual procedure".

Earlier, corporate law firm Mason, Hayes & Curran's director, Mr Paul Egan, who was Dunloe's corporate lawyer, said that, in his opinion, when Mr Byrne sold his Dunloe shares, no price-sensitive information would have been available. Mr Egan said any relevant information that did exist was announced on the Irish Stock Exchange regulatory news network in February 1997 and had also been published in the national papers.

"That information, therefore, was available generally to the public up to and including April 1997," he said.

Mr Egan said the stock exchange and the Irish Association of Investment Managers, of which he is a director, required any existing price-sensitive information be published immediately.

He said that since the earlier announcement of the potential merger in February 1997 until June, when Dunloe asked the exchange to suspend its shares, it had felt no obligation to make such an announcement.

The trial continues before Judge Dominic Lynch.