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Hardie in election spotlight
By Ean Higgins
October 05, 2004

LABOR yesterday reopened the James Hardie Industries asbestos compensation scandal as an election issue, promising a Latham government would refer the matter to US and Dutch authorities for investigation.
ALP corporate governance spokesman Stephen Conroy also said a Labor government would ensure adequate resources for Australia's corporate watchdog to prosecute alleged breaches of corporations law by the company and its officers.

A spokesman for Prime Minister John Howard was more circumspect about encouraging authorities in other countries to act.

"As part of normal processes the Australian Securities and Investments Commission will be liaising with regulators in relevant jurisdictions where appropriate," the spokesman said.

The political moves came as Hardie informed the powerful US Securities & Exchange Commission that it could not file its annual financial return on time.

On Friday, a day after the September 30 deadline, the company told the SEC an independent investigation requested by its US auditors, PricewaterhouseCoopers, needed more time to complete its examination into allegations of illegal conduct.

Hardie had issued a public statement last month saying the filing might have to wait until the legal firm conducting the investigation, Skadden Arps, had access to the Jackson report into Hardie's handling of its asbestos liabilities.

The report, released a fortnight ago following a public inquiry, found evidence that some of Hardie's officers may have breached corporate laws, including misleading the stock exchange. The claims have been denied by the company.

ASIC has already launched an investigation into Hardie following the release of the report, which found the company had knowingly underfunded a foundation it set up in 2001 to fund future asbestos disease victims.

The prospects of an investigation by the SEC in the US, where Hardie has a stock exchange listing and does about 75 per cent of its business, and in The Netherlands, where it has its corporate headquarters based for tax purposes, present serious additional risks for the company.

The SEC would not confirm or deny whether it was investigating Hardie, nor would the Dutch corporate regulator.

Senator Conroy said that, if elected, a Labor government would "refer the Jackson Report to the authorities in the US and The Netherlands for them to investigate".

"James Hardie's actions in setting up a foundation, which was totally inadequate to fund future asbestos-related claims, is one of the most reprehensible acts in Australia's corporate history," he said.

Senator Conroy reiterated his call for Hardie chief executive Peter Macdonald and chief financial officer Peter Shafron to resign, and "for any director on the James Hardie board who was involved in the setting up of the foundation to also resign".

Last week, former Hardie managing director David Say said most board members, including chairman Meredith Hellicar, should resign if Mr Macdonald was forced to go.

Mr Howard's spokesman had no comment on the issue of resignations.

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