THE IRISH Association of Investment Managers (IAIM) will "consider as a matter of urgency" a statement in which the board of DCC reiterated support for its founder, Jim Flavin, in spite of a Supreme Court ruling that he engaged in illegal insider trading.
Well-placed market sources said the IAIM, the representative body for the investment industry, was likely in the coming days to make its first public comment on the affair since the court found against Mr Flavin last summer.
Mr Flavin held insider information on fruit importer Fyffes when selling a large stake in that business for DCC, a holding company with energy, healthcare and distribution interests.
DCC made a profit of €85 million on those deals, which were executed not long before Fyffes issued a profit warning. Mr Flavin's company incurred a charge of €55 million in its last financial year as a result of the ruling and a settlement in April of its litigation with Fyffes.
While some members of the investment community want DCC to bring forward Mr Flavin's retirement, he has said he intends to stay in his position until his scheduled departure in July 2010. In a DCC stock exchange statement yesterday, which brought forward publication of a governance report from its forthcoming annual report, the firm's board set out for the fourth time the reasons for its unanimous support for Mr Flavin.
"The board is satisfied that the established facts surrounding the sales of Fyffes shares in February 2000 fully support its view that the share sales did not involve any intentional wrongdoing on the part of Jim Flavin and in essence were an unwitting breach of civil law under the now repealed Part V of the Irish Companies Act, 1990," the statement said.
A spokesman for the IAIM indicated in clear terms that the organisation, which has examined the case on several occasions in the past year, will review the board's report. "The statement was issued this morning and IAIM will be considering the statement as a matter of urgency."
Director of corporate enforcement Paul Appleby declined to comment on the statement. Mr Appleby, who asked the Supreme Court and the High Court to consider of their own volition whether anyone should be disqualified as a director as a result of the case, is known to be assessing whether to take disqualification proceedings himself.
"I am still looking at my options and a decision will follow in due course," he said.
