The corporate watchdog wants them fined and banned from sitting on boards but several of 10 disgraced former directors of James Hardie Industries say they have already been punished enough.
In a civil penalties hearing in the NSW Supreme Court yesterday, the Australian Securities and Investments Commission outlined the penalties it wants imposed on a former James Hardie board, found earlier this year to have breached the Corporations Act.
In a judgment delivered in April, Justice Ian Gzell found three former executives and seven non-executive directors committed the breaches during the establishment of an asbestos compensation trust in 2001, and a corporate restructuring in 2003. Key to the case was a James Hardie press release approved by the board in February, 2001 that contained misleading and deceptive comments about the company's ability to meet its asbestos compensation liabilities.
The commission is seeking heavy penalties against all directors, especially the executive members of the board.
The corporate watchdog wants former chief executive Peter Macdonald disqualified from managing a company for 12 to 16 years and fined $1.47 million to $1.81 million.
Former James Hardie general counsel Peter Shafron should face a minimum disqualification of eight years and a fine between $350,000 and $450,000, the commission said.
A minimum six-year disqualification and a fine of $150,000 to $250,000 was sought against former chief financial officer Phillip Morley.
The non-executive directors should be disqualified from managing a company for at least five years and fined between $120,000 and $130,000, the commission said.
Among them are former director Meredith Hellicar, who later became James Hardie's chairwoman and has now resigned from all boards, and current Telstra director Peter Willcox.
Commission barrister Tony Bannon, SC, called for the court to make an example of the 10, saying fines and bans would serve as a deterrent to other corporate directors.
Peter Macdonald's legal team argued for a lower-range penalty, but the remaining defendants, including James Hardie Industries NV, argued for exoneration.
Ms Hellicar resigned from her positions on the board of AMP and Amalgamated Holdings a day after the judgment in April found her a most unreliable witness. Her barrister, Tom Bathurst, QC, argued she should be exonerated because she had already suffered and her predicament had sent a clear message to the corporate world.
''If ever general deterrence has been satisfied, what has happened in this case provides what I'll call an ample dose of it,'' he told the court.
Mr Willcox has announced his resignation from the Telstra board but will remain in the job until November at the request of the company. His barrister, Tom Jucovic, QC, described Mr Willcox's situation as a ''de facto disqualification'', and argued further measures were not warranted.
The commission disagreed. MrBannon said, ''If a defendant has sufficient hide to withstand publicity the message would be then 'you don't have to worry about disqualification'.'' AAP
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