High Court Finds James Hardie Directors Guilty of Breaching Duties
Seven directors from James Hardie were found to have breached their duties when they approved the release of a misleading company statement to the stock exchange.
The High Court also held Peter James Saffron liable for failing to perform his duties with diligence. Saffron is the company secretary and general counsel for the building materials company. In its actuarial report, James Hardie said that its compensation funds, which aimed to help victims of asbestos disease, were fully funded.
James Hardie was one of the many companies in Australia that were involved in mining, manufacturing and distributing asbestos and related products. Asbestos has been found to cause many illnesses like malignant mesothelioma and asbestosis.
In 2002, The Australian Council of Trade Unions said thousands of claims for mesothelioma were filed against James Hardie.
That time, the company created a special foundation that would take care of its asbestos liabilities. The company told the stock exchange that the foundation had enough funds to address future claims in compensation.
This turned out to be false, however. After just three years, the fun ran out of money, much to the dismay of the public and those affected by asbestos-related diseases. Observers stated that the foundation was lacked funding by about $1.5 billion.
The company also packed its bags and moved to the Netherlands. This left thousands of victims without proper compensation.
In 2007, a civil case was then filed by the Australian Securities and Investment Commission against the James Hardie directors and officers. These are former chairman Meredith Hellicar, directors Michael Gillfillan, Martin Koffel, Michael Brown, Dan O’ Brien, Peter Willcox and Greg Terry.