"The single most important point that I wish to emphasise is that the alleged price sensitive information given to me in January 2000 had previously been brought to the attention of the Fyffes' board of directors, including myself, on December 9th, 1999."
With these words the chief executive of DCC plc, Jim Flavin, yesterday outlined the centrepiece of his and DCC's defence in the Fyffes/DCC insider dealing case.
He informed the court that the statement made to the market by Fyffes in December 1999, when it was releasing its preliminary results for that year, encompassed the information the fruit distributor is now claiming was price sensitive in February 2000, when DCC sold its Fyffes shares.
Using this information, the board decided on the statement it would make to the market on December 14th, 1999, he said.
"Accordingly the information that Fyffes alleges was price sensitive was nothing of the sort. The import of that information was communicated to the market in a carefully considered statement of Fyffes of December 14th, 1999."
The allegedly price sensitive information was contained in two small documents posted to Mr Flavin in early and late January 2000. The documents contained trading information for the months of November and December 1999, and an estimate for January 2000.
The documents indicated that at the end of the three months, being the first quarter of financial year 2000, Fyffes would have an accumulated loss of €2.7 million.
Mr Flavin told Ms Justice Mary Laffoy that figures brought to the December 9th 1999 board meeting by Fyffes' finance director, Mr Frank Gernon, indicated a cumulative loss for the three months of €3 million, ie less than the loss indicated in the allegedly price sensitive information.
After considering the trading position at the December board meeting, the Fyffes board went on to consider the statement that would accompany the preliminary results due to be released on the 14th. The statement noted that Fyffes and other banana companies were reducing product volumes by more than 10 per cent in 2000, and Fyffes would be vigorously pursuing cost savings.
It said the benefits from the cutbacks in volume, which it was hoped would help prices recover, would be weighted towards the second half of the year. After noting some other matters it finished: "The board believes that, from this position of strength, 2000 will be a year of further growth for Fyffes."
Mr Flavin told the court that the statement concerning cutbacks in volumes clearly implied a difficult current trading position and, in this way, the import of the trading figures presented to the board on December 9th was released to the market.
Fyffes chief executive David McCann has said the outlook statement issued on December 14th did not reflect underlying trading concerns that existed at the time.
Mr Flavin, however, is saying that the statement did reflect the underlying concerns that existed and that the board consciously chose to do this.
He said that when he received the November and December 1999 trading reports on two dates in January 2000, he did not consider they contained new information. Also, he said he did not believe the information they did contain was price sensitive, ie information likely to materially affect the value of Fyffes' shares, had it become generally known.
He said no-one in Fyffes ever said to him in January or February 2000 that he was in possession of price sensitive information. Not even on February 3rd, when he gave the then Fyffes chairman, Neil McCann, a few hours notice of the fact that DCC was about to sell.
That evening he met Mr Neil McCann and Mr David McCann in a hotel and the two men had a bottle of champagne on ice waiting. Not the sort of behaviour you would expect from people who believed you had just sold shares while in possession of price sensitive information, a criminal offence, he suggested.
Mr Flavin referred again to his difficult relationship with the then deputy chairman of Fyffes, Mr Carl McCann. He said everyone knew on February 3rd that DCC was "about to make a substantial profit". Fyffes could have stopped the sale if it believed Mr Flavin had price sensitive information. The difficult relationship would have provided a motive to do this, in addition to the "moral responsibility" Fyffes also had to prevent the commission of what would be an offence, he said.
Of course the defendants in this case are Mr Flavin and DCC, not Fyffes, and what Fyffes did or thought may not be relevant. The key issue is whether Ms Justice Mary Laffoy will agree with Mr Flavin's view of the price sensitivity, or otherwise, of the two documents sent to him in January 2000.
