The surge in the Fyffes share price in early 2000 was fuelled by a "mania" for dotcom stocks and "immense" market interest in Fyffes' internet portal, Worldoffruit.com, launched just months earlier, the Supreme Court was told yesterday.
This huge market interest in Worldoffruit.com provided a dynamic that Fyffes was now wrongly suggesting should be ignored by the court when considering whether information available to DCC chief executive Jim Flavin at the time of the €106 million sale of DCC's stake in Fyffes was "price-sensitive", Mr Michael Cush SC, for DCC, said.
It was DCC's case that "everything" had to be thrown into the mix when considering the nature of the information available to Mr Flavin, counsel added.
While agreeing that "everything" included information about the performance of Fyffes' core business in the first quarter of 2000, Mr Cush said that Fyffes was simply wrong to suggest there was "no new news" in relation to Worldoffruit.com at that time and that its impact must be considered to have been already factored into the share price.
The reality was that Worldoffruit.com was driving the share price in early 2000 and it was wrong for Fyffes to claim that the High Court had "double counted' the impact of the portal when deciding that the information available to Mr Flavin was not price-sensitive (not likely to have a material impact on the Fyffes share price), counsel said.
Mr Cush also argued that the High Court had correctly considered as relevant that Fyffes had not issued a profit warning on the basis of the information available to Mr Flavin prior to the share sales. It never crossed the mind of Fyffes' directors that the information warranted a profit warning, he said.
This was a factor that the courts should not ignore, given that Fyffes had a tradition of reliability in the market and that these authoritative people in Fyffes never considered the information price-sensitive, Mr Cush said.
While agreeing with Mr Justice Nial Fennelly that the subjective view of a company as to whether information was price-sensitive or not was not the "objective test" for deciding whether that information was actually price-sensitive, that company's view was still of significant probative value, counsel said.
Mr Cush agreed with Mr Justice Joseph Finnegan that a note by a solicitor for DCC of a conversation with Mr Flavin prior to the share sales recorded that Mr Flavin had said he "examined his conscience" concerning the proposed share sales. However, Mr Flavin himself had no memory of using those words, counsel said.
Mr Flavin, Mr Cush said, had said the information available to him about Fyffes' trading performance at the time of the February 2000 share sales was the same information available to the Fyffes board in early December 1999, on the basis of which Fyffes had issued a statement on December 14th 1999 predicting that 2000 would be a year of further growth for the company.
Mr Cush was continuing his submissions opposing the appeal by Fyffes against the High Court's dismissal of its claim for some €85 million compensation from DCC over alleged insider dealing by Mr Flavin and DCC in connection with the sale of the DCC stake on three dates in February 2000.
The claims were denied by DCC plc 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.
