Fyffes 'wrong on impact of fruit dotcom'
Thursday June 21 2007
THE surge in the Fyffes share price in early 2000 was fuelled by a "mania" for dot.com stocks and "immense" market interest in Fyffes' internet portal, worldoffruit.com, launched just months earlier, the Supreme Court was told yesterday.
This huge market interest in worldoffruit.com provided a dynamic that Fyffes was now wrongly suggesting should be ignored by the court when considering whether information available to DCC chief executive Jim Flavin at the time of the €106m sale of DCC's stake in Fyffes was "price-sensitive", Michael Cush SC, for DCC, said.
It was DCC's case that "everything" had to be thrown into the mix when considering the nature of the information available to Mr Flavin, counsel added.
While agreeing that "everything" included information about the performance of Fyffes' core business in the first quarter of the financial year 2000, Mr Cush said Fyffes was simply wrong to suggest there was "no new news" in relation to worldoffruit at this time and that its impact must be considered to have been already factored into the share price.
The reality was that worldoffruit was driving the share price in early 2000 and it was wrong for Fyffes to claim that the High Court had "double counted' the impact of worldoffruit when deciding that the information available to Mr Flavin was not price-sensitive, counsel said.
Relevant
Mr Cush also argued that the High Court had correctly considered as relevant that Fyffes had not issued a profit warning on the basis of the information available to Mr Flavin prior to the share sales. It had never crossed the mind of Fyffes directors that the information warranted a profit warning, he said.
This was a factor that the courts should not ignore given that Fyffes had a tradition of reliability in the market and that these reliable authoritative people in Fyffes never considered the information was price-sensitive, Mr Cush said.
Mr Cush agreed with Mr Justice Joseph Finnegan that a note by a solicitor for DCC of a conversation with Mr Flavin prior to the share sales had recorded that Mr Flavin had said he had "examined his conscience" concerning the proposed share sales. However, Mr Flavin himself had no memory of using those words, counsel said.
Mr Flavin, Mr Cush said, had said the information available to him about Fyffes' trading performance at the time of the February 2000 share sales was the same information available to the Fyffes board in early December 1999, on the basis of which Fyffes had issued a statement on December 14, 1999 predicting that 2000 would be a year of further growth for the company.
Mr Cush was continuing his submissions opposing the appeal by Fyffes against the High Court's dismissal of its claim for some €85m compensation from DCC over alleged 'insider dealing' by Mr Flavin and DCC in connection with the sale of the DCC stake in February 2000.
- Ann O'Loughlin
