DCC Regulatory News (DCC)

13 Nov 2007 17:50

DCC PLC13 November 2007 Affidavit on behalf of the Board of DCC plc The Board of DCC plc notes the application to the Irish Supreme Court by the Director of Corporate Enforcement ("DCE") in Ireland, made on notice to Fyffes plc and DCC plc, to be joined as a party in the civil proceedings between Fyffesplc and DCC plc and others for the purpose of alerting the Courts to their statutory powers to disqualify a person from acting as a company director or officer where a Court sees fit in the course of any proceedings. The Supreme Court today dismissed the DCE's application saying that this was a matter for the High Court. The Board of DCC and the other respondents vigorously challenged the grounds on which the DCE based his application, as set out in the attached affidavit by Michael Buckley, DCC's senior independent director, on behalf of the entire DCC plc Board. For Reference: Gerard WhyteCompany SecretaryDCC plcTel: +353 1 2799400 Jim MiltonMurray ConsultantsTel: +353 1 498 0300 +353 86 255 8400 -------------------------------------------------------------------------------- 144/06 THE SUPREME COURT ----------------- BETWEEN: FYFFES PLC Plaintiff/Appellant - and - DCC PLC, S&L INVESTMENTS LIMITED, JAMES FLAVIN AND LOTUS GREEN LIMITED Defendants/Respondents AFFIDAVIT OF MICHAEL BUCKLEY ---------------------------- WILLIAM FRY Solicitors Fitzwilton House Wilton Place Dublin 2 002439.021.OOS/GPS -------------------------------------------------------------------------------- Record No. 144/06 THE SUPREME COURT ----------------- BETWEEN: FYFFES PLC Plaintiff/Appellant - and - DCC PLC, S&L INVESTMENTS LIMITED, JAMES FLAVIN AND LOTUS GREEN LIMITED Defendants/Respondents AFFIDAVIT OF MICHAEL BUCKLEY ---------------------------- I, Michael Buckley, of DCC House, Brewery Road, Stillorgan, Co Dublin, agedeighteen years and upwards, Make Oath and say as follows:- 1. I am the senior independent director of DCC Plc and I make this Affidavit on behalf of all of the Respondents with their authority and consent from facts within my own knowledge save where otherwise appears and whereso appearing I believe the same to be true. 2. I swear this Affidavit in respect of the application issued by the Office of the Director of Corporate Enforcement dated 5 November 2007, and in reply to the Affidavit sworn by the Director of Corporate Enforcement (hereinafter referred to as "the Director") on 2 November 2007. 3. The Director's application seeks an Order from the Supreme Court joining him to the proceedings herein as a notice party for the purpose of adverting to the power, both of the High Court and the Supreme Court, of their own motion, to make disqualification orders pursuant to Section 160(2) Companies Act 1990. As was stated in the letter sent to the Director by the Respondents' solicitors on 26 October 2007 (Exhibit "PA2" of the Director's Affidavit), the Respondents believe that the jurisdiction of both courts under Section 160(2) would not and could not be ousted by any order of the Supreme Court remitting these proceedings to the High Court. 4. The Respondents wish to draw to the attention of the Court serious factual inaccuracies and mis-characterisations of conclusions of the High and Supreme Courts that are contained within the Affidavit of the Director, which, in part, reflect public comments that have been made since the Supreme Court Judgment and which are unfairly damaging to the Respondents. In a number of paragraphs in his grounding affidavit, the Director characterises the Respondents' actions as constituting insider dealing which involved the Respondents using or exploiting inside information for their own profitable benefit. This is a mis-characterisation of what was found by the Courts. It is fair to say that insider dealing in a general context is understood to involve the exploitation of inside information to gain an undeserved profit and indeed in paragraph 16 of his Affidavit the Director describes insider dealing in those terms. Nothing of that nature occurred in the share dealings to which these proceedings relate. As was recognised by the High Court in a finding that was unaffected by this Honourable Court, there was absolutely no evidence that the price sensitive information was used by any of the Respondents or had any bearing on the Respondents in effecting the three share sales. The High Court noted that "on any view of the evidence that information simply had no bearing on the share sales". 5. The breach of Part V of the Companies Act, 1990 contended for by the Plaintiffs arose because the Third Named Respondent was in possession of information which this Honourable Court has now determined was price-sensitive at the time of the three share sales in February 2000. I believe that everyone would agree that it would be a fraud on the market for a person to exploit his access to inside information. However, I believe it is wholly inaccurate, and indeed unfair, of the Director to seek to categorise the dealings of the Respondents as constituting insider dealing involving the exploitation, as distinct from the possession, of price sensitive information. In the High Court, Judge Laffoy made a number of important findings of fact, which were uncontested before this Honourable Court. In his Judgment in the Supreme Court Mr Justice Fennelly stated that in that regard "it is a tribute to the extraordinary patience and care of the learned trial judge that none of her findings of primary fact are challenged on this appeal. Nor does either party question her conclusions on several major legal and factual issues." Among Judge Laffoy's important findings of fact were the following:- " In my view, in this case, the evidence is not open to the interpretation that Mr. Flavin used the information contained in the November and December Trading Reports which is alleged to have been confidential and price sensitive, the negative information in relation to Fyffes' trading and earnings performance in the first quarter of financial year 2000 so as to enable the DCC Group to exit from Fyffes in a manner which would avoid any share price impact which would ensue from the disclosure of that information. In my view, on the evidence, it is clear that what motivated Mr. Flavin in his involvement in the Share Sales and what motivated the almost total exit of the DCC Group from Fyffes in February, 2000 was the opportunity to make a substantial profit because of the increase of the share price on the back of wof.com. The plaintiff has not established any evidential nexus between the profit which the share sales generated for the DCC Group and the use by Mr. Flavin or the use by any of the boards of the corporate defendants, of the confidential information contained in the November and December Trading Reports. On any view of the evidence, that information simply had no bearing on the share sales." " I did not understand the plaintiff to assert dishonesty on the part of any of the defendants. In any event, I find that dishonesty was not established on the evidence." " .... the plaintiff has failed to establish a breach of fiduciary duty on the part of Mr Flavin." These findings, together with the fact that neither Mr. Flavin nor any other director or executive of Fyffes had any appreciation at the time of the Share Sales that the information in the trading reports was price sensitive, demonstrate the unfairness and inaccuracy of the Director's characterisations. 6. I believe and all other members of the Board of the First Named Defendant/Respondent have informed me that they believe that the attempted characterisation by the Director of officers of the Respondent companies as persons whose actions in February 2000 may have damaged the market and may have been contrary to the public interest is unfair and is an appraisal that is not founded in the judgments of the High or Supreme Courts. The Board of Directors of the First Named Defendant/Respondent believes the Respondents should not be subject to reputational damage by reason of unfair representations of what the courts have found. 7. In conclusion, I say that the Respondents do not believe that such an Order as is sought by the Director is justified or necessary and that the making or not making of such an Order would not affect the powers of the courts in any way. SWORN by MICHAEL BUCKLEY this 9th day of November 2007 at Wilton Park House, Wilton Place in the City of Dublin before me a Commissioner for Oaths and I know the Deponent Peter C Hayes Commissioner for Oaths This Affidavit is filed on behalf of the Defendants/Respondents by WILLIAM FRY,Solicitors, Fitzwilton House, Wilton Place, Dublin 2. Filed this 9th day of November 2007 This information is provided by RNS The company news service from the London Stock Exchange