The inner workings of the Irish stock market and two of its biggest companies were held up to unparalleled scrutiny during the course of the insider dealing case taken against DCC by Fyffes. Ostensibly, DCC prevailed yesterday, but it has been cast in an unflattering light along with most of the other players in the drama. It was a pyrrhic victory.
Certainly, DCC and its chief executive Jim Flavin have been vindicated in their claim that they did not avail of price-sensitive information in deciding to sell DCC's shares in Fyffes at a significant profit. But the court also found that, contrary to his assertions, Mr Flavin played a key role in the sale from within this jurisdiction. There are likely to be significant tax issues arising for DCC as a result of the finding that the contention by Mr Flavin and DCC that the deal was done in a hands-off fashion by a Dutch subsidiary was absurd.
This may cost the company millions, but it is unlikely to cost Mr Flavin his job. The jump in the company's share price that followed yesterday's judgment can be taken as an endorsement of Mr Flavin, despite the serious criticism implicit in Ms Justice Mary Laffoy's judgment.
The damage to Fyffes is considerable. It lost the action and now faces costs of €20 million or more. In addition, it also suffered significant collateral damage. During the course of the trial Fyffes' executives showed a breathtaking degree of cynicism when it came to fulfilling obligations to keep shareholders informed of issues that could affect the share price of the company.
The motivation in taking the case was also shown to be somewhat less than clear-cut. It emerged that Fyffes was fundamentally concerned that its own shareholders would punish it for not launching a civil action against DCC if the Director of Public Prosecutions successfully brought a criminal prosecution.
These and other aspects of the case can only serve to dent confidence in the company's management. A fuller explanation of its actions than the one provided to date by Fyffes is necessary.
The Irish Stock Exchange is also badly damaged. It was shown to have gone to peculiar and ill-advised lengths to facilitate efforts by DCC to halt the DPP's inquiry into the share sale. Light was also shone on the back channels between the Irish Stock Exchange and figures in the various stockbroking firms, which it has a duty to regulate, as well as in the wider business community. The Stock Exchange and others have hidden behind the shield of the court case and have refused to address the wider issues. The argument for self-regulation of the Irish stock market is undermined. It is also worth noting that Fyffes and DCC deployed the country's leading lawyers, accountants and investment bankers alongside a bevy of PR consultants and spin doctors in this case. Yesterday may appear to have been a good day for DCC and Jim Flavin, but it is an unedifying judgment on the incestuousness of corporate Ireland.