The High Court of Australia has this week upheld the finding that seven former non-executive directors of James Hardie made misleading statements about the adequacy of asbestos compensation funding.
In 2009 the Supreme Court of New South Wales found former James Hardie non-directors had breached the Corporations Act when making the statements in 2001.
In 2010, the non-executive directors successfully appealed against this decision. But the Australian Securities and Investment Commission (ASIC) appealed against the decision in the High Court the following year, and was successful.
“The case brought into sharp focus the fundamental responsibilities of both executive officers and non-executive directors who are ultimately responsible for significant public company decisions, and the release of information concerning those decisions, to the share market, employees, creditors and the public,” said ASIC Chairman Greg Medcraft.
AMWU National Secretary Paul Bastian also welcomed the decision but questioned whether the law was tough enough on directors and executives generally.
“The Corporations Law needs real teeth to stop fraudulent conveyancing of finances and to be able to pierce the veil of multiple company holdings,” Bastian said in a media statement.
“It also needs to hold corporate directors to account for their moral behaviours and to be able to impose lasting and meaningful penalties on them such as having to attend death-bed hearings of victims and their families or imposing heavy community duty fines.
“This is not simply about numbers on the bottom line or about misleading statements. It is about people’s lives.”
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