An investor would "panic" if they saw information circulated in January 2000 to the Fyffes directors, including DCC plc chief executive Mr Jim Flavin, which showed a poor trading performance by the fruit company, the High Court was told yesterday.

Anyone looking at that information would have seen that Fyffes would have had severe difficulty in meeting its half-year target, Mr Terence O'Rourke, a partner in KPMG accountancy firm, said.

That information, and other material including the Fyffes budget for the fiscal year 2000, would have enabled Mr Flavin to understand that Fyffes was experiencing an historically poor first quarter in 2000.

Mr O'Rourke agreed the information (which consists of trading reports for November and December 1999 and a forecast for January 2000's performance) was not consistent with Fyffes' board announcement, in an outlook statement on December 14th, 1999, that 2000 would be a year of "further growth" for the company.

He also agreed that any investor who read a statement from the chairman of Fyffes, dated January 31st, 2000, and released to shareholders in mid-February 2000, would also believe that the company itself believed 2000 would be a year of "further" growth.

However, he believed the information given to directors in January 2000 would have made an educated investor "very nervous" had the investor seen it.

While agreeing he was not an expert on the stock market, Mr O'Rourke said he was an expert on financial information. It was his view the information available to the Fyffes board in January was confidential and price-sensitive and would have led to a fall in the Fyffes share price.

"Markets hate uncertainty and, in times of uncertainty, people desert shares and shares go down," he said. A 25 per cent fall in Fyffes' share price in March 2000 was, in his view, caused by a profit warning from Fyffes on March 20th, 2000.

Mr O'Rourke, called by Fyffes as an expert witness on accounting issues, was being cross-examined on the 30th day of proceedings in which Fyffes claims the sale, over three days in February 2000, of the DCC stake in Fyffes breached insider dealing provisions of the Companies Act.

The action is against DCC, Mr Flavin and two DCC subsidiaries. All deny the claims and plead the share sales were properly organised. The defendants also deny that they were in possession of price-sensitive information - information likely to materially affect the share price - at the time of the sales.

In cross-examination by Mr Kevin Feeney SC, for DCC, yesterday, Mr O'Rourke agreed he was a partner in KPMG, the firm that had audited accounts for Fyffes in December 2000. He said he had not been asked to address issues regarding that audit but to address, on an independent basis, accountancy issues in the case. He had not discussed any matters with the audit team or reviewed any of their papers.

He agreed that, for the year to December 31st, 2002, KPMG had received €1.42 million from Fyffes for auditors' fees and €896,000 for non-auditing work. For the year to the end of December 2003, the fee for auditors' work was €192,000 and non-audit work was €1.192 million.

He said that Fyffes was a "substantial" client of KPMG's but added that, with KPMG's annual turnover of €150 million, the amounts referred to were "not significant".

He understood that, if auditors believed there was inconsistency between audited financial statements of a company and that company's annual financial statement and outlook, auditors were obliged to discuss them with directors and to have directors prepare a revised statement. If that were not done, the auditors could resign or withdraw.

He agreed he was not an expert on the market but said he had read analyst reports and other material provided to him by Fyffes and had also discussed matters with Fyffes' employees. That material indicated the market expected that 2000 would be another year of growth for Fyffes and that it was disappointed when that growth did not happen.

It was his view that it was the knowledge that Fyffes would not meet its half-year targets, which was announced to the market by Fyffes in a profit warning of March 20th, 2000, that led to the drop in Fyffes' share price. The price had fallen by 25 per cent by close of business on March 21st.

He agreed Fyffes' share price had fallen by about 20 per cent from mid-February to March 17th. He believed that was due to the beginning of a falling interest in internet stocks. He believed the share price fall from March 20th was due to a market perception of Fyffes' poor trading performance for the first half of the fiscal year 2000 (beginning November 1999).

He did not recall seeing any document in Fyffes indicating that management believed that non-trading items, such as court cases the company was involved in, could help it achieve its half-year targets. He could not recall being told that Fyffes' results for the first half of the year were traditionally heavily weighted towards the last six to eight weeks of that half.

He believed there was a qualitative difference between information available to Fyffes' directors in January and information available to directors at a board meeting on December 9th, 1999. An investor who read the information available to directors in January would take from it that things were going badly. Such an investor would not need the company's budget for 2000 to be able to interpret that information.

He agreed that, in seven of the nine years prior to the fiscal year 2000, Fyffes had returned results for the first quarter that were worse than those for the same period the previous year. However, he added, the results for the first quarter of the fiscal year 2000 were worse than the results for the same quarter in any of the previous nine years.

The case continues on Tuesday before Ms Justice Laffoy.