DCC chief executive Mr Jim Flavin asked a stockbroker not to talk to Fyffes about a possible sale of the DCC stake in Fyffes, according to a tape of a conversation between both men which was played in the High Court yesterday.

The conversation was held on February 3rd, 2000, the date of the first of three sales of Fyffes shares for a total price of €106 million.

Another taped recording of a phone conversation on the same day between Mr Flavin and Mr Ronan Godfrey, head of Davy's equity desk, recorded Mr Flavin laughing immediately after telling Mr Godfrey: "I have no authority on the matter [ of selling the Fyffes shares]."

Tapes of a number of conversations stated to have been been between Mr Godfrey and Mr Flavin were played in court yesterday, the 32nd day of the hearing of the action in which Fyffes alleges that the sale of the DCC stake in Fyffes over three days in February 2000 breached insider-dealing provisions of the Companies Act.

The proceedings are against DCC, Mr Flavin and two DCC subsidiaries, Lotus Green and S & L Investments Ltd. The defendants deny the claims and plead that the sales were properly organised by Lotus Green. They also deny possession of price-sensitive information at the time of the share sales.

The recordings of the conversations were produced to the court by a prosecution witness, Ms Paula Downey, who is head of compliance at Davy.

In one conversation on February 3rd, 2000, Mr Godfrey was recorded as saying he would bid for 17,895,697 ordinary shares at €3.20. Mr Flavin stated: "OK, I'll come back to you."

Mr Flavin also said: "It may be that you get a call, not from me, but from a guy from ING Bank in Holland, Tom Diepenhorst, and if it's not him, you can take it they have authority to give an instruction."

Mr Flavin was also recorded as saying: "I have no authority on the matter" after which there was a laugh.

Mr Godfrey said: "OK, so you'll have to come back and say you're happy to deal though, or will you, or?"

Mr Flavin replied: "Yeah, I know, if you get a call from ING Bank, they'll know all about it, you can take instructions from them instead of me." He added, "the shares are in Holland".

He was also recorded as saying: "In fact, you know, doing it won't be with us at all. It will be entirely between here and Holland, I wouldn't want any trail of paper between here and..."

In what was referred to as "call eight", on the same afternoon, Mr Godfrey was quoted as saying: "Jim, I'm going to ring Carl [ McCann, then deputy chairman of Fyffes] as well to say that we're going to try and do something."

Mr Flavin was quoted as replying: "Ah no, no, no please please no. I've to deal with Neil, you've no instructions from us to talk to Carl or the company whatsoever. This is a private transaction between Davy's and DCC. I'm astounded at what you are saying."

Mr Godfrey: "That what? That I shouldn't talk to Fyffes, who are also our clients?"

Mr Flavin: "Absolutely, absolutely, I mean you've no authority to talk to them in relation to any transaction that DCC is contemplating, none whatsoever, Ronan, I'm astounded."

Later in the same conversation Mr Godfrey said: "They are well aware of what's going on Jim."

Mr Flavin: "Yeah, I know."

Mr Godfrey: "They've been ringing us constantly, hearing that we're trying to do something in the market, and what's going on and all this."

Mr Flavin: "No, I've talked to Neil, I'm about to talk to him again."

In another recording on the same day, Mr Diepenhorst was recorded as saying to Mr Godfrey that he was from Lotus Green in Amsterdam. He said: "We sell to you, we being Lotus Green in Amsterdam."

Correspondence between Ms Downey and the Irish Stock Exchange in relation to the February sales of the Fyffes shares was also read to the court. The exchange had put some questions to Davy in its investigation into the sales.

In one reply of September 2000, Ms Downey said she was advised that the level of contact regarding the Fyffes shares increased from January 2000.

She also said that DCC was a continuing corporate client of Davy and its ongoing contact with DCC was primarily Mr Flavin. She said Davy's counterparty to the transactions of February 3rd was actually Lotus Green Limited.

In a letter of May 30th, 2001, Ms Downey wrote that, during January 2000, Davy's Mr Kyran McLaughlin and Mr Godfrey had ongoing discussions with Mr Flavin regarding the company's shares in Fyffes. Mr Godfrey recalled that the various conversations led him to believe that DCC might be interested in selling its holding, and that it was probably in conversation with a number of brokers in this regard.

"Ronan also recalls that he asked Mr Flavin on a number of occasions if DCC was a seller of Fyffes, and was in turn asked if we were bidding, but at no time did Mr Flavin give him a firm offer. However, Ronan did form the impression that DCC was a seller if the price was at the right level," Ms Downey wrote.

Earlier yesterday, chartered accountant Mr John Donnelly was cross-examined by Mr Michael Cush SC, for DCC, about his claim that Mr Flavin possessed insider information at the time of the February 2000 deals. Mr Donnelly agreed with Mr Cush that it was a very serious allegation.

Mr Cush suggested that Mr Donnelly was in no position to offer testimony or opinion on the question of price sensitivity, because he was not qualified to do so and had not done the basic work in relation to the market.

Mr Donnelly denied the suggestion that he had not done the basic work involved, and said he was reasonably experienced and qualified to offer an opinion on price sensitivity.

Mr Cush also put to Mr Donnelly that DCC had very clear advice as long ago as 1998 that it was not bound by the stock exchange's model codes in relation to dealings in Fyffes shares.

Mr Donnelly said Mr Flavin was bound by procedures relating to directors' involvement in the sale of shares.