DCC chief executive Jim Flavin told the High Court yesterday that the company never believed Fyffes could be serious about bringing legal proceedings over the sale of DCC's shareholding in Fyffes.

Mr Flavin was under continuing cross-examination on the 46th day of proceedings by Fyffes alleging insider dealing in relation to the sale of the DCC stake in Fyffes in February 2000.

DCC, Mr Flavin and two DCC subsidiaries - S&L Investments Ltd and Lotus Green - deny the claims and plead that the share sales were properly carried out by Lotus Green.

The court has been told that, for tax reasons, the beneficial ownership of the DCC stake in Fyffes was transferred to Lotus Green in 1995.

Paul Gallagher SC for Fyffes said Mr Flavin had already told the court that Lotus Green was dependent on publicly available information with regard to the Fyffes' shareholding.

Mr Flavin replied that Lotus Green never had any unpublished information and no trading results except that Fergal O'Dwyer, DCC's chief financial officer, would have had trading results up to April 1996.

Mr Gallagher said that it would make it all the more important if Lotus Green was to seriously consider the disposal of its Fyffes shareholding that it would have up-to-date information.

Mr Flavin replied that, from 1995 onwards, with the exception of directors' fees, he was "totally remote" from Lotus Green.

Mr Gallagher said this would mean that the Lotus Green board of directors did not have information concerning the difficulties in the banana market in the latter part of 1999.

Mr Flavin said that he did not know what information the board had.

Mr Gallagher asked Mr Flavin if he was ever aware that the information contained in an up-to-date analyst's report was not included in the briefing memorandum which formed the basis of the Lotus Green decision to sell the shares?

Mr Flavin said that, at all stages, he had been "totally remote" from the business of Lotus Green.

He very deliberately kept a long way from Lotus Green from the time of its establishment onwards.

Mr Gallagher asked if it surprised Mr Flavin that a board could make a decision to sell its sole asset worth in excess of €100 million without getting any brokers' commentaries on earnings or share prices?

Mr Flavin said that this was a unique set of circumstances in that a share price, which had been recognised by the market as being somewhat undervalued for all of the 1990s, and that suddenly took off.

In the space of eight weeks, its share value rose by 133 per cent, from €1.60-1.65 to €4.

This was a price which very much recognised the future potential or hoped for potential of Worldoffruit.com, Fyffes' internet venture.

Mr Flavin said that he had no knowledge as to whether or not the outlook statement in the preliminary announcement on Fyffes was furnished to the Lotus Green board.

Asked how he knew that the Lotus Green board followed all the public information on Fyffes for a five-year period, Mr Flavin replied that this was his belief and he also knew that Mr O'Dwyer, a director of Lotus Green, went to its board meetings on a fairly regular basis.

Mr Gallagher asked how would Lotus Green brief with a memorandum containing outdated information if it followed all the public information available on Fyffes.

Mr Flavin said that was a matter for Lotus Green.

Mr Gallagher said that there were documents attached to that memorandum sent to Mr Terry O'Driscoll of Price Waterhouse Coopers - who was stated to be the person who provided tax advice to DCC and the group generally - by Mr O'Dwyer, which did not include the outlook in the preliminary announcement statement.

Mr Flavin said that he was not aware of that. He said that Price Waterhouse Coopers was very deeply involved in the set-up of Lotus Green.

He had general knowledge - mainly through the current action - that Mr O'Dwyer was always careful to take the advice of Price Waterhouse Coopers and that the tax considerations were always paramount.

Mr Flavin said it was believed "as a generalisation" to be important that not only was Lotus Green managed and controlled in the Netherlands, but that the decision-making process in relation to Fyffes' shares was for them.

Not only was that reality important from a taxation point of view, but it was important that documentation reflected that reality.

All the directors of Lotus Green and relevant parties in DCC knew very clearly that the raison d'etre of Lotus Green was for tax planning purposes.

Mr Flavin said that one thing he was unshakeable on was the totally unsolicited nature of the approaches for "the stock".

He believed that he gave no encouragement for those offers to be made and that the offers came from the market and that he "reacted to events".

He recalled saying to Neil McCann, then chairman of Fyffes, that he was very pleased with the way things did happen "and not just the incredible prices that were being offered but the fact that it was a wide-ranging institution of shareholders", who specifically wanted to come into Fyffes at that time as a result of the Worldoffruit.com internet venture.

The hearing before Ms Justice Laffoy continues today.