JIM FLAVIN kept a low profile yesterday, declining interview requests and issuing only a short statement in reaction to the findings of the High Court-appointed inspector into the controversial sale of Fyffes shares by DCC in 2000.
The former DCC executive chairman and founder will no doubt feel vindicated by the inspector’s findings, although the Supreme Court ruling in 2008 remains in place.
In his report, Bill Shipsey stated clearly that there was “no deliberate wrongdoing or dishonesty” on Mr Flavin’s part in relation to the DCC sale of a 10 per cent stake in Fyffes through a Dutch subsidiary called Lotus Green.
Mr Flavin will not now face any proceedings to disqualify him from acting as a company director.
Mr Shipsey said Mr Flavin’s was “an error of appreciation and judgment: judgment as to what the Supreme Court would find as a matter of law to constitute ‘price sensitive’ information” within the meaning of the Companies Act.
Mr Shipsey found Mr Flavin’s conclusion that he was not in possession of price sensitive information had a rational, if legally wrong, basis. “There were a number of reasons, which objectively speaking were relevant to any consideration as to whether he was or was not in possession of price sensitive information.”
Mr Shipsey noted that while Mr Flavin and DCC must “accept” the Supreme Court finding, “it is relevant to report that none of the directors or advisers or the stockbrokers for the institutional investors who purchased the sales were of the view that the information was price sensitive”.
The inspector said this belief was “genuine, and not merely because it suited them”.
Mr Shipsey “concluded” that Mr Flavin did not “communicate” the price sensitive Fyffes information in his possession “to anyone in the companies other than to the DCC group compliance officer Michael Scholefield, as part of a compliance procedure, and the companies’ legal adviser, Alvin Price, for the purpose of seeking legal advice”.
Mr Shipsey said he was “satisfied” that no person involved in affecting the share sales in DCC knew that Jim Flavin had any information of a “price sensitive nature in his possession which could make the dealing unlawful”.
In his report, Mr Shipsey acknowledges that the error was a costly one for DCC and Mr Flavin.
“It was arguably more costly in terms of the reputational damage to both DCC and Jim Flavin,” Mr Shipsey said. “No finding of mine can repair the reputational damage inflicted in this matter.
“At least, however, the suggestions that the dealing was intentionally wrongful, or that it was evidence of dishonesty on the part of Jim Flavin and of a culture of disrespect for the companies code in DCC, can be dispelled.”
While this finding will be of some comfort to Mr Flavin, the sands of time cannot be reversed. For the past five years, Mr Flavin has been the subject of much negative commentary relating to his involvement in the share dealing.
He initially decided to tough it out in the wake of the Supreme Court’s negative finding, but the decision by corporate enforcer Paul Appleby to seek the appointment of a High Court inspector in May 2008 hastened Mr Flavin’s departure from DCC.
A brief statement issued on his behalf yesterday was to the point. “Jim Flavin feels that the report speaks for itself. He welcomes the report which follows a very thorough and complete investigation by Mr Bill Shipsey SC. He has nothing further to add at this stage.”
