The Stock Exchange responds to issues arising from media coverage during the recent Fyffes plc vs DCC plc court case.

Introduction:

1. During 2005, while the Fyffes/DCC cases in the High Court and Supreme Court were in progress, the Irish Stock Exchange [ the exchange] was the subject of a number of criticisms in the media relating to issues arising from this case.

2. While much of what was alleged in the media at the time was inaccurate and misleading, the exchange firmly believed that it would have been inappropriate to respond to the allegations made while the substantive case itself was continuing, and it had clear legal advice that it should not do so.

Now that the case has been concluded, it is possible for the exchange to respond.

3. In essence, the various criticisms made of the exchange fall into two categories:

• that the exchange should not have engaged in anything to do with the matters under investigation once it had submitted its initial report to the DPP;

• that the exchange acted in league with one party to the dispute to undermine the report which it had itself submitted to the DPP.

4. The Irish Stock Exchange rejects these arguments in the strongest possible terms.

These criticisms were clearly based on arguments made during a Supreme Court case arising from the High Court case in this matter. The exchange was not a party to that case and was not in a position to address these matters in the court.

The judgments which followed that hearing from both Mr Justice McCracken and Mr Justice Fennelly did address, inter alia, these points and did not support them. Unfortunately, these judgments received significantly less attention than the arguments made during the case itself.

In respect of these criticisms, the exchange would make the following points:

Engaging in further dialogue about the matters under investigation following the submission of its initial report to the DPP.

1. One of the themes running through the criticisms of the exchange is the belief that it was inappropriate for it to have any further dealings on this matter once it had made its initial report to the DPP.

2. However, both the DPP and the Supreme Court confirmed that it was, in fact, appropriate that the exchange should continue to engage in this matter after submitting its report. Mr Justice McCracken, who addressed this matter specifically in his judgment, commented that [ pages 12 and 13 of 14]: "I see nothing improper in DCC giving further information to the stock exchange and asking that it be sent to the Director of Public Prosecutions for consideration by him, if the stock exchange should think this was proper. It is of course in the interests of DCC that there should be no prosecution, but equally, it is in the public interest that a decision as to whether there should be a prosecution should be taken by the DPP in the full knowledge of all the facts, not only those which were originally communicated to him."

3. The appropriateness of ongoing contact on this issue (subsequent to the submission of its initial report to the DPP) was also confirmed to the exchange by the DPP's office during the course of frequent contact between the exchange and the office of the DPP during January 2003.

Specifically:

• The DPP wrote to the exchange on January 9th, 2003, acknowledging the update provided (by the exchange) and noting that it would be of considerable assistance to his office to know the basis on which the DCC expert opinions were arrived at.

• The DPP again wrote to the exchange on January 22nd (in reply to a further letter from the exchange on this issue) during the course of which the DPP reiterated his interest in the information being offered by DCC and furthermore stated that the preferred way to proceed was for the expert opinions to be made available via the exchange.

The motives for the exchange's ongoing engagement on this issue.

1. The exchange rejects completely the suggestion that it acted in any way to undermine the report which it had submitted to the DPP.

2. The facts clearly demonstrate that the exchange refused to be restricted in its ability to liaise with the DPP's office in respect of its conversations with DCC plc and that it did engage in close and frequent dialogue with the DPP's office, including seeking guidance from that office as to how it wished the exchange to deal with the matter.

3. The only interest of the exchange in its dealings on this issue was to ensure in so far as practicable that the DPP's office had access to the fullest amount of relevant information (including new expert opinions), which might have a bearing on the ultimate decision of that office on this matter.

4. This approach was discussed with and supported by the DPP in various communications which arose after DCC had initiated contact with the exchange.

Indeed, in written correspondence to the exchange (in January 2003 also reference above), the DPP reiterated his interest in the information being offered by DCC and stated that the preferred way to proceed was for the new expert opinions to be made available via the exchange.

5. The objectivity of the exchange in these matters is also demonstrated by its insistence upon an agreement with DCC and its advisers, which recognised the exchange's right to advise the DPP on its views in relation to matters discussed/reviewed "whether such report be in favour of or against DCC" [ref: Justice McCracken page 13 of 14].

In their respective judgments, both Mr Justice McCracken and Mr Justice Fennelly explicitly acknowledged that the stock exchange itself had expressly stated to DCC plc and their advisers that no agreement on confidentiality in respect of documents they might receive from DCC in respect of the allegation of insider dealing would extend to keeping such matters confidential from the DPP.

Mr Justice McCracken quotes extensively from a letter of December 2nd, 2002, signed by Tom Healy, which was effectively the confidentiality agreement between the exchange and DCC plc. The quotation he uses includes the following lines from the letter signed by Mr Healy and sent to DCC plc [ page 6 of 14]: "Notwithstanding the foregoing, we will be entitled, following our review of the information, to inform the DPP of the fact of that review having been carried out and of the broad conclusions drawn by us from the review."

Further on in his judgment, Mr Justice McCracken comments [ page 13 of 14]: "The confidentiality agreement makes it quite clear, firstly that the stock exchange were at liberty to make a report to the DPP on its views in the light of the documents, whether such report be in favour of or against DCC, and secondly, that the stock exchange, being aware of its obligations under Section 115 [of the Companies Act, 1990] expressly reserved the right to disclose the documents if there was a legal requirement for them to do so."

In his judgement, Mr Justice Fennelly comments [ page 4 of 11]: "It is only fair to point out that the stock exchange insisted that they could not be precluded from communicating with the DPP in the performance of their statutory supervisory functions."

6. The bona fides of the exchange throughout this process are also demonstrated by its ongoing, close dialogue with the DPP's office, appraising it of the contact which it was having with DCC in relation to the matter.

• The exchange wrote to the DPP on January 2nd, 2003, indicating that it had now reviewed the DCC expert opinions and requesting guidance on how the DPP wished to proceed.

• The DPP replied on January 9th, acknowledging the update provided and noting that it would be of considerable assistance to his office to know the basis on which the DCC expert opinions were arrived at.

• The exchange again wrote to the DPP on January 16th concerning matters of a procedural nature on the handling of the expert opinions.

• The DPP responded on January 22nd, and in this letter the DPP reiterated his interest in the information being offered by DCC and furthermore stated that the preferred way to proceed was for the expert opinions to be made available via the exchange.

• The exchange wrote to the DPP on January 31st with a further update on the interaction with DCC and its advisors.

• The exchange's position in dealings with DCC and its advisers remained that, if DCC were to provide copies of the expert opinions, that these would immediately be passed to the DPP.

• DCC ultimately passed these reports to the exchange in July 2003, which then immediately provided them to the DPP.

In conclusion:

1. Allegations of insider dealing are extremely serious matters. Inevitably, they arouse significant public interest when they are made. However, the exchange is severely restricted when it comes to discussing such matters, not least because of its regulatory responsibilities in this area. Ironically, these restrictions also severely curtail the freedom of the exchange to defend its actions in public when it is criticised.

The exchange expects public scrutiny of how it performs its regulatory responsibilities. However, in the interests of the individuals, companies and investors involved in the Irish market, it is vital that such scrutiny is itself balanced and fair; that it reflects a considered and measured analysis of all relevant information and that it resists the temptation to draw sweeping conclusions from what is often very limited information.