The chief executive of Fyffes plc yesterday accused the leading Irish stockbroking firm of Davy of "setting up" his company in relation to a €106 million share deal. Colm Keena reports
Mr David McCann told the High Court he believed that a presentation by him to potential investors in January 2000 had been arranged by Davy for reasons other than those given to Fyffes.
He said he now believed that the presentation on January 31st, 2000, was arranged to facilitate the sale of Fyffes shares held by DCC plc and that DCC's chief executive, Mr Jim Flavin, was aware of this and had asked Davy not to tell Fyffes.
On February 3rd, 2000, DCC made the first of three share sales that netted the company €106 million at a time when the Fyffes share price was at an unprecedented level.
Davy acted in the share sales and received substantial commission payments.
On March 20th, 2000, Fyffes issued a profit warning that led to a sharp fall in its share price. The company now alleges that Mr Flavin and DCC were in possession of price-sensitive information at the time of the share sales. Mr Flavin was at the time a non-executive director in Fyffes.
Yesterday was the 12th day of the High Court action taken by Fyffes, alleging insider dealing by DCC and Mr Flavin. Mr Flavin and DCC are contesting the case which, if it is won by Fyffes, could cost DCC the entire profit it made on its Fyffes shareholding - €85 million.
Mr McCann said Fyffes was told by Davy that the hastily-arranged presentation to potential investors was to satisfy investor interest that existed in Fyffes' internet project, worldoffruit.com
Mr McCann said he based his belief that Davy was "setting up" the company on the fact that a conversation he had had with Mr Flavin before the meeting convinced him that Mr Flavin knew of his, Mr McCann's, scheduled meetings with potential investors in London on February 1st, 2000. He believed this information came from Davy.
Also, when he asked Mr Ronan Godfrey, of Davy, on February 3rd if there was "anything cooking", Mr Godfrey told him there was not.
Mr McCann told Mr Kevin Feeney SC, for Mr Flavin and DCC, he believed Mr Godfrey had been told not to tell Fyffes of the share sale by DCC. Davy acts as stockbroker to both DCC and Fyffes.
Mr Feeney said it was Mr McCann's "suspicious mind" that made Mr McCann think "in terms of a plot" that had not existed.