DCC, the investment group facing an €85 million insider dealing action, has strengthened its board and reformed its corporate governance structure.
Mr Maurice Keane, the former chief executive of the Bank of Ireland, has been co-opted on to the board as senior independent director.
The company has also announced that Mr Alex Spain, the chairman of the company, will relinquish his chairmanship of two key board sub-committees. A former managing partner of KPMG in Ireland, Mr Spain has been chairman of DCC since 1976. He was chairman of National Irish Bank from 1986 to 1998, a period during which the bank overcharged hundreds of customers and sold investment products that facilitated tax evasion. A report by High Court-appointed inspectors into NIB is due to be published shortly.
DCC and its chief executive, Mr Jim Flavin, are currently facing a number of insider trading allegations relating to the sale of shares in Fyffes, the fruit distributor, in early February 2000. The Garda Bureau of Fraud Investigation is also investigating the sale by DCC of its shares in Fyffes just ahead of a profit warning in early 2000. Mr Keane's agreement to join the DCC board is seen as a vote of confidence in the company which has vigorously denied the allegations.
Mr Tony Barry, one of the existing non-executive directors, will assume chairmanship of the remuneration committee which sets the salary of the chief executive and other senior staff. Another non-executive director, Mr Paddy Gallagher, will take over as chairman of the audit committee which is responsible for dealing with external auditors and other related issues. Mr Barry is a director of Bank of Ireland and chairman of Greencore. He is a former chairman and and chief executive of CRH and one of the directors with links to Ansbacher, the offshore bank run from CRH's offices in the late 1980s and early 1990s by the then chairman, the late Mr Des Traynor.
Mr Gallagher is a former head of legal and pensions administration at Guinness Ireland Group. Mr Spain will retain his role as chairman of the nomination committee, which deals with board appointments. The changes are in line with the recommendations of the Irish Association of Investment Managers, according to a DCC spokesman.
DCC is being sued in the civil courts by Fyffes and four investment houses in connection with the February 2000 sale of its 10 per cent stake in Fyffes. Shares in the quoted fruit-distribution company fell sharply just after DCC sold its stake when it issued a profits warning. Fyffes has claimed that DCC had inside information because Mr Flavin sat on its board and had access to the management accounts.
Two Irish institutions, Hibernian and Eagle Star, have also taken civil action against DCC, as have Boston-based Putnam Asset Management and Denver-based Founders Asset Management.
DCC has denied the allegations claiming the Fyffes shares were held by a separate special-purpose subsidiary called Lotus Green and the directors of Lotus Green would not have access to any information supplied to Mr Flavin in his role as a Fyffe's director. The various cases being taken against DCC are not expected to be heard until later this year at the earliest. The Garda Bureau of Fraud Investigation has been looking into the case since late last year, but has refused to comment.
