Analysis: The DCC shief said he must have had talks in 2000 with Mr Barrett about the exchange inquiry but couldn't remember them, writes Colm Keena, Public Affairs Correspondent.

In the wake of the sale by DCC of its stake in Fyffes for €106 million and, six weeks later, the issuing of a profit warning by Fyffes, the Irish Stock Exchange began an inquiry because of concerns about possible insider trading.

In his evidence yesterday, the chief executive of DCC, Jim Flavin, initially said that he first learned of an inquiry in this regard by the stock exchange to Goodbody Stockbrokers while preparing for the case before the court.

Senior counsel Paul Gallagher, for Fyffes, then drew Mr Flavin's attention to a copy of a fax to the head of Goodbody, Roy Barrett, from Mr Flavin, on September 14th, 2000. Goodbody had been contacted by the stock exchange six days earlier.

The fax in part read: "Further to our discussion, I attach extracts from our report to the stock exchange with references to Goodbodys Stockbrokers highlighted and relevant faxes from Lotus Green."

Mr Flavin said he must have had discussions in 2000 with Mr Barrett about the stock-exchange inquiry but he couldn't remember them.

Mr Flavin and DCC deny that he was in possession of price-sensitive information at the time of the deals, and also say that Mr Flavin did not in fact deal. The deal was done by Lotus Green, a DCC subsidiary based in the Netherlands, they say.

Mr Flavin said he must have been telling Mr Barrett in September 2000 that it was Lotus Green that had dealt. He said Mr Barrett may not have been clear on this at the time the deals were being done, and may have thought it was DCC and Mr Flavin with whom he and his firm had dealt. He said he didn't want Mr Barrett and Goodbody to convey a mistaken impression to the exchange.

Mr Gallagher asked if Mr Flavin was seeking to "co-ordinate Goodbody's response to the stock exchange with DCC's response?" Mr Flavin said he wanted to insure the exchange had "proper information on which to make a judgment".

Mr Flavin said he thought the word "co-ordinate" was an unfair characterisation. "We did not co-ordinate any response from brokers."

He said he believed the decision to discuss the issue with Goodbody was his and not that of his board.

Mr Gallagher said he presumed Mr Flavin understood that, when the exchange writes to Goodbody under the regulations governing its role as a regulator, it was "looking for Goodbody's understanding or statement as to what happened".

Mr Flavin said some aspects of the matter were now coming back to him. He had later contacts with Mr Barrett where Mr Barrett was "extremely careful in whatever he said to me so that the conversation tended to be pretty one-sided and there is a reason for that, judge. Mr Barrett was and is a director of the Irish Stock Exchange."

Mr Gallagher then referred to contacts that occurred between Fyffes and Mr Flavin in August 2000 and a letter sent by Mr Neil McCann, the then chairman of Fyffes, on August 29th, 2000.

This letter has already been read to the court. In it, Mr McCann referred to a phone call from Mr Flavin a few weeks earlier and the idea of the two men meeting to discuss matters regarding the DCC deal. Mr McCann referred to Mr Flavin having said the two sides "have a common interest and that it would not be helpful for either of us to be going off making solo runs".

He finished by saying: "I am not familiar with the rules and regulations covering discussions which are the subject of stock exchange enquiries. I am inclined to think that we may be constrained from discussing the matter and perhaps any suggestion of co-operation may be inappropriate."

Mr Flavin said he believed this was a letter written by Fyffes that was "for the record".

Mr Gallagher indicated that these matters may be returned to later in Mr Flavin's cross-examination.

The court has heard that Fyffes had been intending to call Mr Barrett but was now not doing so. But he is to be called by DCC.

DCC's shares in Fyffes were sold between February 3rd and February 14th, 2000. Goodbody and Davy stockbrokers were involved jointly in the first deal, when half of the stock was sold at €3.20 a share. The remainder was sold by Goodbody at €3.60 and €3.90 on the dates concerned.

Evidence heard yesterday indicated that, up to soon after midday on the date of the first sale, it was believed by DCC that Davy acting alone would be selling all the shares in one tranche. Then Mr Barrett called and half the shares ended up being sold in a sale handled by both firms. The rest of the shares were sold later by Goodbody acting alone.

A large amount of commission that might have been earned by Davy was, therefore, earned by Goodbody.

Relations between Mr McLaughlin and Mr Flavin deteriorated after February 3rd, Mr Flavin said.