Former James Hardie board failed in their duties, Court
23 April 2009 Content provided to you by AAP.
By Drew CratchleySYDNEY, April 22 AAP -
Former James Hardie board members face fines and disqualification from ever managing a company again when a judgment is delivered on Thursday relating to the company's asbestos liabilities.
The landmark legal action launched by the Australian Securities and Investments Commission (ASIC) could also have ramifications for all Australian executives, with the case seen as a test of the responsibilities of directors of public companies.
Justice Ian Gzell will deliver his judgment in the civil case brought by ASIC against 10 former James Hardie directors and executives in the NSW Supreme Court at 10am (AEST).Among the defendants are former James Hardie chief executive Peter Macdonald, former company secretary Peter Shafron and former chairwoman Meredith Hellicar.ASIC is also seeking penalties against James Hardie Industries NV and ABN 60, formerly known as James Hardie Industries Ltd.
Each of the former senior and non-executive directors are alleged to have breached their duties as outlined by corporations law in a number of actions between February 2001 and June 2003.
At the centre of the allegations are public statements issued by James Hardie in 2001 that a fund set up to meet its compensation liabilities was fully funded.Just two years later, the company's compensation foundation was found to be underfunded by more than $1 billion.Aspects of James Hardie's relocation to the Netherlands in 2001 and the cancellation of some its shares are also covered by ASIC's action.
If found guilty, the defendants face a maximum penalty of $200,000 and, for the individuals, disqualification from managing a corporation.The case began in September last year, and sat for 45 days in a courtroom specially fitted with computers and broadband connections to enable the thousands of documents tendered in the trial to be accessed by the defendants and Justice Gzell.
Each day, the room was filled with the dozens of barristers employed by the defendants, and an equally large number of assistants.Those legal teams came at a massive cost, with James Hardie's current management telling investors in February it had so far amassed $US12.3 million ($A17.63 million) in legal costs as a result of this case.
Asbestos widow Karen Banton and asbestos-related disease sufferers attended the first day of the trial, but were not seen during the detailed and often complicated hearings.
Asbestos Diseases Foundation of Australia president Barry Robson said victims were not overly optimistic about the judgment."I hope justice prevails and I hope the full force of the law comes down on them," Mr Robson told AAP."(But) we're very sceptical that they're going to be found guilty of anything, and that's the legal advice we've been receiving.
"Six of the defendants appeared to give evidence in the trial, including Ms Hellicar and former chief financial officer Phillip Morley, while Messrs Macdonald and Shafron relied on written statements.It is not known if any defendants will attend the judgment.
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