Unfinished business

THE AGREEMENT by DCC to pay €41 million in compensation to Fyffes and other parties that suffered losses as a result of its insider trading in Fyffes shares is intended to bring an end to one of the most squalid  episodes in recent Irish commercial life.

The guilt of DCC and its executive chairman Jim Flavin was established last year by the Supreme Court and yesterday's settlement heads off the last remaining aspect of the five-year-old action: the adjudication of damages by the High Court. The figure is equivalent to about a quarter of DCC's annual profits and thus amounts to a hefty penalty. By this measure justice has been done and many would argue that the time has come to move on.

To do so, however, would be to gloss over the systemic weakness and moral ambivalence endemic in parts of Irish commercial life that was brought so vividly into view by the Fyffes DCC case. Some of the hitherto most respected business figures in the State were shown to have played little more than lip service to the concept of corporate governance and the strictures of company law. They were ably abetted in doing so by a host of professional advisers and the efforts made on DCC's behalf to head off the action are among the most disturbing revelations.

The settlement announced yesterday also short circuits the only effort to date to hold some of the individuals involved to account. The attempt by the Office of the Director of Corporate Enforcement to have the court adjudicate on the fitness of various individuals mentioned in the litigation to hold corporate office appears to have died along with the case.

As things stand none of the checks and balances meant to hold individuals accountable have worked. Bar some embarrassment, Mr Flavin appears to have emerged unscathed. Neither he nor any of the other individuals involved have accepted personal responsibility and resigned their positions; none of them have been fired by their boards or shareholders; none of them have been censured by the myriad of professional bodies of which they are members and none have felt the wrath of the main regulatory bodies - namely the Irish Financial Services Regulatory Authority or the Stock Exchange. The system, such as it is, has failed completely.

It is open to the Director of Corporate Enforcement to bring his own proceedings against the individuals involved. Doing so would be both lengthy and expensive, but he must proceed in the interests of standards and accountability in Irish business.

© 2008 The Irish Times

This article appears in the print edition of the Irish Times