James Hardie directors 'mislead ASX'
SEVEN former non-executive directors of James Hardie misled the Australian Stock Exchange about how much money was available to compensate victims of asbestos exposure.
More than 10 years after the construction products manufacturer set up a fund to compensate victims of asbestos exposure, the High Court has found that company directors misled the ASX.
A 2001 restructure of the company removed liability-stricken business units from the Hardie group, creating a foundation to fund compensation claims against the companies by victims of asbestos products.
A civil challenge the Australian Securities and Investment Commission brought against the Hardie directors in the New South Wales Supreme Court in 2007 was appealed to the state's Court of Appeal.
That court allowed the appeal to proceed, as ASIC had not called a crucial witness, which the court found that ASIC's case was "so diminished as to not have been proven".
The ASIC then appealed the case to the High Court, which made a decision today.
The High Court held that the seven directors of James Hardie had breached their duties, in misleading the stock exchange on the amount of money available to pay compensation to victims of asbestos-related products.
The court returned the case to the New South Wales Court of Appeal for "further consideration of remaining issues".
In a separate but related case heard today, the High Court held that former company secretary and counsel, Peter James Shafron, failed to discharge his duties as a company officer with the required "care and diligence".
The court held that Mr Shafron also failed to advise the James Hardie board that a study he commissioned to predict asbestos-related liabilities "suffered from critical limitations".
The ASIC will make a statement on the matter later today.