Shipsey can't repair damage to Flavin
Nothing can over-ride the Supreme Court judgment of unlawful trading, writes Alan Ruddock
Corporate Ireland breathed a sigh of relief on Tuesday morning when the High Court ordered the immediate publication of its inspector's report into the Jim Flavin and DCC affair. Instead of a damning indictment of low standards in high places, Bill Shipsey, the inspector, delivered a ringing endorsement of DCC's corporate culture and declared that Flavin had been guilty of no more than an error of judgment and appreciation when he orchestrated the sale of DCC's shareholding in Fyffes in February 2000 while in the possession of price-sensitive inside information.
According to Shipsey "the good news . . . is that the court, the public and the market can be assured and take comfort from the fact that one of Ireland's largest listed public companies had a well-developed culture of compliance, maintained high corporate standards and was a good corporate citizen, notwithstanding the costly error of appreciation by its then chief executive . . . [The actions and behaviour of DCC and its subsidiaries] measured up to the standards required by law notwithstanding Mr Flavin's error of judgment." It was a remarkable conclusion, but Shipsey had not finished: "No finding of mine can repair the reputational damage to both DCC and Jim Flavin."
The controversial share sale, which produced profits of €85m for DCC, triggered a mighty legal battle between Fyffes, DCC and Flavin which ended in the Supreme Court seven years later. Fyffes claimed that Flavin, a Fyffes director at the time of the deal, had known about its poor trading performance when he sold the shares, but that the rest of the market did not know. When that information was released to the market, Fyffes shares fell sharply.