A retired partner in Goodbody stockbrokers who held some €500,000 worth of shares in Fyffes plc wrote a series of angry letters to the company from March 2000 suggesting that a profit warning issued that month should have been issued earlier, the High Court heard yesterday.

The shareholder queried exactly what information about Fyffes' trading performance in the last months of 1999 and early 2000 was known to all Fyffes board members prior to the March 20th profit warning.

The shareholder also referred to media comment about the "fortuitous" sale in February 2000 of the DCC stake in Fyffes, while DCC chief executive Mr Jim Flavin was a member of the Fyffes board. He warned Fyffes "could have been tainted by the episode". The unnamed shareholder had, according to Fyffes chairman Carl McCann, lost a good deal of money after the Fyffes share price plummeted from March 2000.

Mr Carl McCann yesterday disagreed with a suggestion by Mr Michael Cush SC, for DCC, that replies by Fyffes then chairman, Mr Neil McCann, to the shareholder's correspondence supported DCC's version of events as they had developed within Fyffes from October 1999 and was inconsistent with the version of those same events being advanced by Fyffes to the court.

In its legal proceedings alleging "insider dealing" by DCC in Fyffes shares in February 2000, Fyffes claims that information made available to all board members in January 2000, including Mr Flavin, showed that Fyffes' trading performance for the first two months of the fiscal year 2000 (beginning November 1999) was significantly behind budget and behind the previous year's performance for the same period. It claims the information also indicated a poor performance for January 2000. All of that information, Fyffes contends, was highly confidential and price sensitive.

Fyffes alleges that DCC and Mr Flavin were in possession of that information at the time of the controversial sale of the DCC stake over three days in February 2000 and that DCC was therefore prohibited from dealing in the shares.

DCC, Mr Flavin and two DCC subsidiaries deny the claims. DCC claims the information was not price sensitive and says that claim is supported by Fyffes own behaviour up to the profit warning of March 20th, 2000. DCC contends that the fact that Fyffes did not issue a profit warning until then shows that Fyffes itself was not particularly concerned about the trading performance in the first quarter and was seeking to achieve an upturn from late January/February and not from early January.

Yesterday, the 28th day of the case, Mr Cush suggested to Mr Carl McCann that replies from Fyffes from March to August 2000 to the aggrieved shareholder supported the DCC defence.

In various letters the shareholder said that Fyffes' profit warning of March 20th had surprised him. He noted below-anticipated returns had occurred in November and December 1999 and asked whether the problem was known earlier than March by the "full board" and if so, when. He said no fault should accrue to management in profit-warning situations when factors outside their control were the issue but added: "There is something very disturbing about this episode."

In a further letter, of May 9th, 2000, the shareholder said he did not consider a phone call from Mr Carl McCann useful in addressing his concerns. He noted Mr McCann had suggested "seasonal bias" as a possible other reason for the profit warning but he had replied that seasonal bias would normally be allowed for in budgets.

In another letter, of August 3rd, 2000, the shareholder said Fyffes had not addressed the points he had raised and his contention that the November/ December 1999 returns were not just, as Fyffes had said, "significantly lower", but were, in his view, "probably awful" to bring about an overall outcome of 40-50 per cent below expectations.

He also wrote: "I have to accept your statement that the first you knew of DCC's selling was February 3rd simply because you say so. What Mr Flavin knew or did not know is, I think, likely to be speculated on at length over many a business lunch.

"That the conclusions arrived at are unlikely to be flattering either to DCC or Fyffes is an opinion I share with others."

In a number of replies to the shareholder, Mr Neil McCann wrote that the trading performance is "subject to significant seasonal variations, with November and December typically among the least profitable months... the company normally expects a seasonal improvement in trading in late January/early February".

It was Fyffes experience that the performance in November and December "has not proved to be a particularly accurate indicator of likely trading patterns for the remainder of the financial year and a poor performance in those months in the past has not in itself resulted in a shortfall in the first half".

In a final reply of August 15th, 2000, Mr Neil McCann told the shareholder that Fyffes operated in a complex business subject to significant seasonal variation "with the results in the first six months weighted heavily towards the last 6-8 weeks of that period".

He said the timing and tenor of Fyffes communications with shareholders were matters of judgment based on the best information available at the time and he was satisfied Fyffes had acted correctly and promptly in connection with all the matters the shareholder had raised.

Mr Cush suggested that Fyffes' replies to the correspondence were carefully thought out and showed that the events which led to Fyffes issuing its profit warning dated from March 10th, 2000.

Mr Carl McCann said while he probably had some input into the correspondence, he would not stand over every word. He said the shareholder was not just criticising Fyffes but was also aiming at DCC. He agreed Fyffes would traditionally budget for a better performance from January onwards but said the usual pattern was for improvements on a staged basis from the first week of January. He rejected any suggestion that November and December were irrelevant months.

He said the upturn Fyffes had hoped for in January did not happen and the company had relied on a good outcome from court cases to make its half-year targets, which in the event did not happen.

Fyffes had made its best judgment at the time and might not have done the wisest thing. At the end of January, Fyffes was some €14 million behind its figures for the same quarter the previous year. This was very relevant because the DCC sale occurred from February 3rd.

Also yesterday, Fyffes company secretary Mr Philip Halpenny concluded his evidence and was then cross-examined by Mr Michael Ashe SC, for DCC. Mr Halpenny said he drafted a profit warning on March 14th, 2000, and had an uncomfortable meeting with an analyst from Goodbody's in Frankfurt the following day.

When Fyffes issued an outlook statement on December 14th, 1999, predicting that 2000 would be a year of "further growth", the company had knowledge that the November and December performance was behind budget but was also aware a new year could reverse that. The board took the view it was too early to call the 2000 year, he said.

The case continues today before Ms Justice Laffoy.