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Issue # 1425      26 August 2009

Hardie directors fined a pittance

Last week the Supreme Court disqualified former Hardie chief executive Peter McDonald from managing a company in Australia for 15 years and fined him $350,000 over the under-funded asbestos compensation fund. Ten former Hardie executives were also fined, between $75,000 and $30,000, pittance amounts.

Ahead of the Supreme Court’s decision in the ASIC civil prosecution, Australia’s peak victim’s advocacy organisation called for the Australian government to commit fines levied by the Court into the asbestos compensation fund for victims, into education about the safe handling of asbestos and into research to find a cure for mesothelioma.

The Asbestos Diseases Foundation of Australia (adfa) said that these fines would normally go into consolidated revenue but on this occasion the priority should be victims of the company’s asbestos products.

Adfa President Barry Robson said that under the Corporations Act, Justice Ian Gzell can impose fines and/or ban individuals from being directors of a company and that if the maximum fines are handed down all up it should have totalled in excess of $2 million.

“We say the fines should go to the victims – after all the fines would arise out of the company, executives and directors behaviour in trying to move off shore without leaving adequate funds for victims.” Mr Robson said that the first priority should be a loan to the Fund that pays victims compensation.

“The prosecution may be over today but this is not over for Hardie’s victims. There is no certainty that future compensation awards will be met given the Fund is running out of money and Hardies have refused to top it up. Hardie is crying poor – citing the global financial crisis – yet at its Information to Shareholders Meeting in Sydney it talked up its profitability and consequently its share price increased by 21 percent.

“We cannot forget the victims – they are still sick and dying. They deserve some sense of justice – there has still been no criminal prosecutions of Hardies’ directors both for their recent conduct or in making a product they knew could kill people without warning its workers or users of its products.”

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