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James Hardie cosmetically removes CEO and CFO
28/09/04 By: Andrew Nelson

James Hardie Industries NV (JHX) today advised that effective immediately, Mr Peter Macdonald is standing aside as CEO and Mr Peter Shafron is standing aside as CFO. An acting CEO and acting CFO will be appointed, with the board expecting to make announcements in respect of these appointments in due course.

The building supplies giant explained that in order “to preserve business continuity,” Mr Macdonald has agreed to still be responsible for the business operations of James Hardie. He will remain based in the United States and his position will be reviewed as matters surrounding the Commissioner’s report and the ASIC investigation become clearer.

Mr Shafron’s future role with the company is also under consideration with the board saying it plans that he will undertake a number of projects for the company, outside the CFO’s function, in both the United States and the Netherlands. Mr Shafron’s position will also be reviewed as matters surrounding the Commissioner’s report and the ASIC investigation become clearer, the company said.

The move comes after the company’s board advised that they had reviewed the report of the Special Commission of Inquiry into the establishment of the Medical Research and Compensation Foundation and acknowledged the seriousness of Commissioner Jackson’s findings.

Among othet things, the inquiry found that Mr Macdonald and Mr Shafron had both engaged in misleading and deceptive conduct, and in Mr Macdonald's case, he may have broken the law. However, the two men have also led the company through a period of successful growth in both sales and profits and the James Hardie board seems reluctant to let them go.

The company said they have already taken steps to address matters raised in the Commissioner’s report, while also ensuring the business continues to perform well in the interests of shareholders and all other stakeholders (including current and future asbestos claimants, employees, contractors and business partners) who are dependent on the continued financial strength of the company.

As previously announced, the Special Committee of the Board will continue to oversee all matters relating to asbestos compensation and the Commissioner’s report.

James Hardie Chairman, Meredith Hellicar, said the company has the will and the capacity to address a key finding of the Commissioner’s report, which stresses the need to develop a means of sustainable long-term compensation for asbestos disease sufferers.

“James Hardie acknowledges the moral obligations it has to legitimate claimants. We will seek to work with the ACTU, as requested by Premier Carr, to develop a solution that is in the interests of claimants, shareholders and all parties that rely on James Hardie for their livelihood, income or well-being,” Ms Hellicar said.

The Chairman also welcomed the clarification of some disputed matters put before the Commission, including the rationale for establishing the Medical Research and Compensation Foundation and the re-domicile of the holding company to The Netherlands.

“In these areas in particular, the Commissioner’s findings do not support many of the allegations made against the company during the course of the Commission,” she concluded.

At 1027 AEST, shares in James Hardie were up 10c to $5.88 on the news.

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