A HIGH Court inquiry into DCC's sale in 2000 of its stake in fruit importer Fyffes and its earlier transfer of that stake to a subsidiary is set to proceed after the industrial holding company chose not to make an appeal in the Supreme Court against the appointment of an inspector.
Bill Shipsey SC will conduct the inspection into DCC and two of its subsidiaries, SL Investment and Lotus Green.
Although DCC's opposition in the High Court to the inspector's appointment led to speculation that it would go to the Supreme Court, the company noted yesterday that Mr Shipsey's terms of reference were limited to an investigation into the affairs of the companies in respect of the transactions in question.
"The inspectorship does not relate to the ongoing business of the group," DCC said. "DCC's focus will be to facilitate a timely conclusion of the inspection, given the very specific issues to be examined by the inspector."
DCC shares gained nine cent in a downbeat market yesterday to close at €15.45.
The Supreme Court ruled unanimously last summer that DCC founder Jim Flavin was in possession of insider information on Fyffes when he sold DCC's stake in the company. He resigned as executive chairman in May.
Mr Shipsey will examine and define the transactions related to the acquisition, maintenance, transfer and disposal of the beneficial and legal interest in Fyffes which was held by DCC and its subsidiaries. He will also examine whether the law on insider dealing and the disclosure of interests in shares was breached by any officer of the companies. If so, he must identify the circumstances of the breach in question.
Director of Corporate Enforcement Paul Appleby, who asked the High Court to initiate the inspection, indicated previously that the inspector would be "doing well" to complete his work within 12 months.
If the inspector makes any findings of misconduct, it will be open to Mr Appleby to take disqualification proceedings against anyone involved in the trades.
The cost of the inspection will be borne in the first instance by the Department of Enterprise, Trade and Employment. However, Mr Appleby has said that costs would be sought from DCC if the inspector's findings went against the company.
Appointing Mr Shipsey in a ruling on Tuesday, Mr Justice Peter Kelly declined Mr Appleby's application to empower the inspector to examine "any related matters with the prior approval of the court" on consideration of an interim report.
The judge said there were circumstances suggesting unlawfulness in DCC's conduct of its affairs relating to the transfer of its stake in Fyffes in 1995 and/or the sale of the stake in 2000. A thorough investigation was in the public interest, he said.
The judge had put a stay until 2pm today on Mr Shipsey's appointment to give DCC time to decide on an appeal.
"The boards of DCC plc, SL Investments Ltd and Lotus Green Ltd have decided not to appeal the appointment by the Irish High Court on July 29th, 2008, of Mr Bill Shipsey SC as an inspector under section eight of the Irish Companies Act 1990," DCC said yesterday.
