Mesothelioma: A Killer Lurks in the Lungs

Mesothelioma & Asbestos News Page

Home Page

Australia's Hardie may face charges over asbestos

The inquiry said Hardie should have set aside up to $A2.2 billion in a special compensation fund, seven times the $A293 million pool it created in 2001 for sufferers of a deadly disease that scars and hardens the lungs.

New South Wales State Premier Bob Carr, whose government commissioned the report, said it could trigger criminal charges against company executives. Union officials said Hardie Chief Executive Peter Macdonald should quit, or be fired.

"To put it directly, James Hardie Industries NV still has in its pockets the profits made by dealing in asbestos, and those profits are large enough to satisfy most, perhaps all, of the claims of victims of James Hardie asbestos," Commissioner David Jackson said in the 576-page inquiry report.

A statement by Hardie to the Australian Stock Exchange on February 16, 2001 that its foundation was fully funded was "misleading and deceptive," he said.

A decision on whether to take further action against Hardie would be up to a federal prosecutor, Jackson said.

Carr said he had written to Prime Minister John Howard urging the government to bring Hardie managers to justice.

"James Hardie must pay up," Carr told reporters, vowing not to meet with the company until it met with victims and unions.

Hardie executives, who earlier asked that trading in the company's shares be halted, were expected to comment later.

US energy services company Halliburton Co has been weighed down for years by asbestos liabilities related to two of its units which are under bankruptcy protection.

In July, Halliburton said a US district court approved a $US4.2 billion asbestos settlement.

One analyst said the Australian report, after an initial reading, was "somewhat positive" for Hardie given the inquiry recommended the company negotiate a compensation scheme.

"It limits the downside on the stock. That's what the initial report seems to suggest," said Kiran Singh, analyst at fund manager Invesco Australia.

Hardie shares resumed trading late yesterday at $A5.80, up 3.76 per cent from Monday's close, but still down a quarter from a record high of $A7.81 last October, before the company fund said it's fund faced a shortfall in cash to meet claims.

The report said the fund would run out of money by 2006.

HIGHEST DEATH RATE

Australia has the world's highest death rate from mesothelioma, a fatal lung disease caused by exposure to asbestos, once used as a fire-retardant in wallboards and other products before the country banned it in 1984.

Two former Hardie units made asbestos products from the 1920s. Hardie is the biggest maker of home sidings in the United States, where it generates nearly 80 per cent of its almost $US1 billion annual sales.

Hardie directors, including Macdonald and Finance and Legal Vice President Peter Shafron, broke federal law by relying on faulty consultancy estimates, known as the Trowbridge Report, when deciding how big to make the fund, Jackson said.

"In so far as Mr Macdonald and Mr Shafron are concerned, in my view they breached their duties as (company) officers by encouraging the board to act on the Trowbridge Report in forming a view that the foundation would be 'fully funded'," he said.

Australia's main trade union group, which has pressed for open-ended compensation for asbestos disease sufferers, called for Macdonald to resign.

"I think Mr Macdonald should do the decent thing and resign immediately," Greg Combet, president of the Australian Council of Trade Unions, told reporters.

Invesco's Singh said that while the chief executive and chief financial officer may have breached some fiduciary duties, the report appeared to have left room for some of the blame to be shifted to Trowbridge.

Analysts have estimated shares in Hardie, which is in excellent operational shape on the back of its ability to make low-cost siding, would trade above $A9 if not for asbestos woes.

The company said last week it would meet all compensation claims and may seek shareholder cash to do so.

Back to News Page

More News:

James Hardie Underfunded Asbestos Fund, Inquiry Says (Update1) Sept. 21 (Bloomberg) -- James Hardie Industries NV underfunded a trust to compensate asbestos victims by at least A$1.5 billion ($1.1 billion) and misled investors when it said it had set aside enough money to pay all victims, a New South Wales state government inquiry found.

James Hardie's Macdonald Misled on Asbestos Fund, Inquiry Says Sept. 21 (Bloomberg) -- James Hardie Industries NV Chief Executive Peter Macdonald may face charges for misleading investors on how much money a company trust needed to compensate asbestos victims, an Australian state government inquiry found.

The headteacher of a Derby school at the centre of an asbestos scare has been suspended after an inquiry into events around its three-month closure. Around £750,000 had to be spent decontaminating the school in Mickleover after asbestos was found during routine building work in March.

Following are the 10 largest political contributors to Madison County circuit and 5th District appellate judges since Jan. 1, 2002. The totals include contributions from individual attorneys within the firms. The totals do not include lawyers' contributions that fell below the reporting threshold of $150.

Canada must stop selling asbestos to world HOWARD PAWLEY AND HARRY GLASBEEK Canada has a justified reputation for compassion, for its willingness to make sacrifices to help people in war-torn countries, for its commitment to health care for all. Yet, it is on the brink of staining its pride of place among nations by its stubborn support of the insupportable.

Plaintiff bar gives top dollar to judges' campaigns By Kevin McDermott The biggest recipient of donations was Democrat Gordon E. Maag, a 5th District appellate judge now running for the Illinois Supreme Court. SPRINGFIELD, Ill. - Madison County judges, who are among the most successful in the state in attracting political donations, are getting the biggest chunk of that money from just one side of the courtroom: the plaintiff attorneys.

The World Today - Tuesday, 21 September , 2004 12:18:05 Reporter: Stephen Long ELEANOR HALL: To a breaking story in Sydney – the verdict on the building products company James Hardie is in. Seven months after he began hearings, David Jackson QC today handed down the findings of the special commission of inquiry into a massive shortfall in funding for the foundation James Hardie set up to pay asbestos claims.

Hardie lawyers cleared of fraud Sep 21 16:24 AAP The law firm that acted for James Hardie Industries failed to disclose important information when it helped the company move its headquarters to the Netherlands, an inquiry found today.

Hardie should fund cure: victim September 21, 2004 A MESOTHELIOMA sufferer whose father died from the same disease said today James Hardie Industries should be forced to fund research into a cure and not just compensation.

UPDATE:James Hardie Misled Investors On Asbestos-Inquiry By Morag MacKinnon Of DOW JONES NEWSWIRES SYDNEY (Dow Jones)--James Hardie Industries NV (JHX) misled shareholders when it said in February 2001 that it had set aside sufficient funds to compensate victims of asbestos, a government inquiry found Tuesday.

Back to Original Article on Mesothelioma

Back to News Page