It had "never occurred" to fruit importers Fyffes that DCC chief executive Jim Flavin had price-sensitive information at the time of the €106 million sale of the DCC stake in the fruit distributor in early 2000, counsel for DCC told the Supreme Court yesterday.
It had also never occurred to Fyffes that this information warranted disclosure to the stock market, the court was told.
This was because, as the High Court had correctly found, the information was not price sensitive - information likely to have a material effect on the share price - and therefore did not require to be disclosed to the stock market, DCC has argued.
Michael Cush SC, for DCC, was beginning his submissions opposing the appeal by Fyffes against the High Court's rejection of its claim of "insider dealing" by Mr Flavin and DCC in connection with the sale of the DCC stake on three dates in February 2000.
Fyffes has contended in the appeal that Ms Justice Mary Laffoy had wrongly found Mr Flavin did not have price-sensitive information when he dealt in the shares.
It says that conclusion was inconsistent with the trial judge's findings that the information in Mr Flavin's possession contained "unquestionably bad news" about Fyffes' trading and economic performance in the first quarter of the financial year 2000.
Fyffes' appeal arises from its unsuccessful 87-day High Court action in which it sought some €85 million compensation for the share deals of February 2000.
The action was against DCC and S & L investments, of DCC House, Stillorgan, Co Dublin; Mr Flavin, of Shankill, Co Dublin; and Lotus Green Ltd, of Fitzwilton House, Wilton Place, Dublin, a subsidiary of DCC to which beneficial ownership of the Fyffes stake was transferred in 1995 to avoid payment of capital gains tax in the event of any future disposal of the shares.
In her December 2005 judgment, Ms Justice Laffoy found Mr Flavin did "deal" in the Fyffes shares in relation to the February 2000 share sales but did not do so unlawfully.
She held the "only reasonable conclusion" from the evidence, particularly from tapes of phone conversations between stockbrokers and Mr Flavin, was that Mr Flavin had "controlled the whole process".
However, the judge ruled, there was "a fundamental incongruity" between Fyffes' own conduct in early 2000 and its claim that Mr Flavin had - at that time - price-sensitive information which would have materially affected the Fyffes share price had it been made available to the stock market.
That information consisted of Fyffes' trading reports for November and December 1999 indicating negative trading performance in the first quarter of the financial year 2000.
What was being said and done by Fyffes executives did not reveal any awareness by them in February 2000 that the information in the November and December trading reports was price sensitive, the judge ruled.
Submissions on behalf of Fyffes concluded late yesterday afternoon after which Mr Cush began submissions to the court for DCC.
He will continue those submissions today before the five-judge court.
