SEVEN former James Hardie directors have lost an appeal in the NSW Court of Appeal to scrap penalties and disqualifications, ending a marathon legal battle over the board's 2001 decision to release misleading information about a compensation fund for asbestos victims.
However, the fine against former company secretary and general counsel, Peter Shafron, increased from $50,000 to $75,000 and a seven-year ban as a company director was kept because he held key actuarial information about the fund.
The other directors - Meredith Hellicar, Michael Brown, Michael Gillfillan, Martin Koffel, Dan O'Brien, Greg Terry, and Peter Willcox - had five-year bans reduced to three years and fines reduced from $30,000 to $25,000, and to $20,000 for two US-based directors.
(Former chief executive Peter Macdonald was not part of the appeal.)
The case centred around the board's decision in February 2001 to approve a statement to the stock market that James Hardie would transfer two former asbestos-producing subsidiaries into a new ''Medical Research Compensation Foundation''. The statement said this was ''fully funded'' to meet all asbestos claims - it turned out to be $1.5 billion short.
Australian Securities and Investments Commissions launched legal action in February 2007 and in May this year the High Court confirmed the original Supreme Court ruling.
The directors were found to have breached their duty to act with care.