The High Court has ordered DCC chief executive Jim Flavin to give a fuller answer to questions about a taped phone call relating to controversial share dealings in the fruit distributor Fyffes.
The answer already provided by Mr Flavin was not sufficient, Ms Justice Laffoy ruled today. She said Mr Flavin must provide a fuller answer.
Mr Flavin had been asked to confirm whether a transcript of a phone conversation which allegedly took place on February 3 2000 between Mr Flavin and Ronan Godfrey, head of the equity desk at Davy Stockbrokers, is accurate.
Fyffes claims the transcript presents Mr Flavin as 'actively negotiating'' the terms on which shares were to be sold.
In his reply to the question, delivered last August, Mr Flavin said he could not confirm the transcript was accurate. He said that, due to the absence of context, the passage of time and since he had not heard the recording itself, he was unable to swear on oath that it was a true or substantially true record of the conversation.
Mr Flavin added that he had had a number of telephone conversations with Mr Godfrey on February 3 2000, one of which did relate to matters covered in the questions put to him.
A copy of the tape recording of the phone call was given to Mr Flavin last month but Fyffes claimed he had still failed to confirm whether the transcript of the recording was accurate.
Solicitors for DCC and Mr Flavin had replied on November 16 last that, since Mr Flavin answered the questions in August, they had themselves obtained a copy of the relevant tape. The solicitors said that, as the call occurred some four and a half years ago, their clients were not in a position to confirm the accuracy of the transcript of that call. They added that Mr Flavin would give evidence about the telephone call during the hearing of legal proceedings related to the share dealings, which are due to open next Thursday.
After hearing submissions on behalf of Fyffes and Mr Flavin, Ms Justice Laffoy said matters had moved on since Mr Flavin had given that reply last August. Mr Flavin had since been given the tape of the phone conversation.
She said the answer given by Mr Flavin did not really answer the question posed to him. In her view, his reply was not sufficient and she would direct that Mr Flavin give a further reply. She said she was finding the question had not been sufficiently answered and it should be.
The answers are being sought by Fyffes for the purpose of a major legal action, due to open next week, relating to the sale and purchase of shares in Fyffes. Fyffes has brought the proceedings against DCC, S&L Investments, Mr Flavin and Lotus Green, which is a subsidiary of DCC which owned 10% of Fyffes.
The proceedings arise form a series of transactions occurring between February 3 and 14 2000 when shares in Fyffes, of which DCC was the registered owner, were sold.
A central issue in the proceedings relates to whether Mr Flavin, in connection with those transactions, 'dealt' in shares of Fyffes in a manner prohibited by Section 108 of the Companies Act.
Fyffes claims Mr Flavin took advantage of financial information he allegedly obtained as non-executive director of Fyffes to procure the sale of DCC's stake in the fruit distributor in February 2000 at a profit of €85m.
Mr Flavin has denied the claims and denied that he was possession of price sensitive information or that he passed on any such information to Lotus Green. Mr Flavin is not a director of Lotus Green. DCC has also denied allegations of insider trading.
In the course of discovery for the legal proceedings, Fyffes secured a copy of a transcript of a number of phone conversations, including between Mr Flavin and Mr Godfrey, on February 3 2000. Davy Stockbrokers was the company to whom a tranche of Fyffes shares was sold on that day.
In an affidavit, Conor McDonnell, solicitor for Fyffes, said it was fair to say the transcript presented Mr Flavin as actively negotiating the terms on which the shares were to be sold. This was of considerable importance not just because of Mr Flavin's denial that he dealt in the shares but also because all four defendants had contended the person who dealt in the shares was Lotus Green, which was alleged to be the beneficial owner of the shares.
