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post Posted: Dec 15 2005, 10:29 PM
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In reply to: Zeus on Wednesday 19/10/05 08:58pm

The ASIC is now chasing James Hardie directors!!!

The following article is from,00.html

Trailed by asbestos
Now that the compensation deal has been done, ASIC is chasing James Hardie chiefs, writes Ean Higgins
December 07, 2005

FOR James Hardie Industries Limited chairwoman Meredith Hellicar, Bob Carr's sudden decision on July 27 to quit politics was bad luck. The NSW premier had been prepared to give Hellicar one key thing she and her fellow directors and executives wanted out of their tough negotiations with the state Government for a multi-billion-dollar compensation deal for Hardie's asbestos victims.

Hellicar wanted Carr to protect Hardie's directors and executives from possible civil prosecution by the Australian Securities and Investments Commission. ASIC is hot on the trail of the Hardie chiefs over a range of alleged breaches of corporate law, some involving jailable offences, in relation to Hardie's underfunding an independent asbestos compensation foundation in 2001.

NSW special commissioner David Jackson QC, who investigated the Hardie asbestos funding affair, found evidence Hardie and some of its officers engaged in deceptive or misleading conduct, breaches of directors' duties and other offences.

The company and officers in question all deny any wrongdoing. But to be on the safe side, Hellicar wanted Carr to legislate immunities in exchange for agreeing to pay $1.6billion into a fund to meet compensation claims of the thousands of Australians who will die or be crippled by the asbestos products Hardie manufactured up until 1987.

Carr, despite publicly jumping up and down about what a disgrace the global building materials company had been, was ready to cut a backroom deal. ASIC got wind of it, and Treasurer Peter Costello exposed it back in May, warning Carr that it would not be right to put Hardie's chiefs above the law.

But Carr defended the move as necessary to get a deal for asbestos victims, and took on Costello. Had Carr stayed in office, Hellicar and her colleagues might well be home and hosed, ASIC would have been hamstrung, and the Hardie saga would be effectively over in terms of the alleged wrongdoings.

But Carr's successor Morris Iemma took a different view. He would not grant the immunities. Iemma also decided it was time to bring the laborious negotiations with Hardie to an end. He set a final deadline of Thursday last week, the last full day of parliament this year, for Hardie to sign up to the deal, or he would bring in punitive legislation to force it to do so.

With just minutes to go, Hellicar signed. The $1.6 billion deal has standard releases for the directors and executives from being sued for compensation, which lawyers say is quite reasonable since Hardie has agreed to pay the compensation. But it does not have the immunities from ASIC prosecution that Hellicar sought. This means that ASIC can go after Hardie for either criminal offences or civil offences, which require a lower burden of proof. The civil offences will not put anyone in jail, but can result in fines and, more importantly, bans from holding directorships or managing positions.

According to sources close to the investigation, now that the compensation deal has been signed without the immunities, ASIC will go full bore on Hardie. ASIC officers have been bringing in reams of documents, going well beyond those supplied by the Jackson commission. They have also interviewed a number of witnesses. The task has a long way to go, but Costello has provided millions of dollars for extra resources for this specific investigation.

The ASIC officers are looking at the matters raised by Jackson, but going well beyond them. They are exploring Jackson's findings of evidence against former Hardie chief executive Peter Macdonald, and former chief financial officer Peter Shafron, in relation to misleading and deceptive conduct.

Jackson found evidence that Macdonald provided "false and misleading" information to the stock exchange when he said the compensation fund Hardie created in February 2001 with $293 million would be "fully funded". One of the alleged breaches mentioned by Jackson is a criminal offence, and if tried and convicted under the provision, he could face up to seven years in jail.

Jackson found both Macdonald and Shafron breached their duties as officers.

These alleged contraventions by Macdonald and Shafron, which relate to the period in 2001 - when Hardie set up the Medical Research and Compensation Foundation, separated itself from its Australian asbestos liabilities, and moved to The Netherlands - have attracted the most attention. But it is understood that one of the other key aspects of the ASIC investigation relates to a transaction in 2003, in which Hellicar played a crucial role.

When it applied to the NSW Supreme Court in 2001 to move to The Netherlands, Hardie, through its lawyers Allens Arthur Robinson, was asked by Justice Kim Santow what the company would do for the asbestos victims. Hardie replied that the MRCF had money to cover claims against its two main former asbestos producing subsidiaries. In addition, Hardie said, the Australian "shell" company, JHIL, which would be left after the move, would have access to $1.9 billion of partly paid shares in the new Dutch parent to cover any of its residual asbestos liabilities.

Only 18 months after the green light from Santow, Hardie cancelled the partly paids, cutting JHIL off from access to the $1.9billion. The company did not inform the market, or Santow. That transaction is the subject of an ongoing investigation by NSW Attorney-General Bob Debus into whether the Supreme Court was misled by Hardie or Allens. Under NSW law this would be contempt of court, carrying unlimited penalties including jail terms. Both the company and the law firm have denied they misled the court.

However, ASIC is looking at a separate offence under the Corporations Act in relation to the partly paid shares. Section256(b) says a company must not reduce its share capital if it would "materially prejudice the company's ability to pay its creditors". If a company officer is found to have wrongfully reduced capital, it is a breach of Section256(b). If the officer is found to have done so dishonestly, it can carry a jail term of up to five years.

The issue is whether, when Hardie cancelled the shares, it knew the MRCF, or the two former Hardie asbestos subsidiaries the MRCF inherited, could be considered creditors. Earlier this year, Hellicar emphatically said they were not.

But the Jackson commission heard evidence that the MRCF directors had, as far back as mid 2001, repeatedly told Hardie there was nowhere near enough money in the trust to cover future liabilities, and demanded the company put in more.

Hellicar, who trained as a lawyer, was on the board committee that recommended cancelling the partly paid shares. In the interview, she said the cancellation was perfectly justified because JHIL's own potential liabilities and that of potential creditors had been more than covered.

In the NSW Parliament in October, Labor MP Ian West said ASIC was interested in Hellicar's role in the cancellation of the partly paid shares. When asked about this at a press conference last Thursday, Hellicar said she did not know what or who ASIC was investigating.

"They haven't spoken to me," she said.

A source close to the ASIC investigation said the watchdog had lots of witnesses yet tointerview.

post Posted: Oct 19 2005, 08:58 PM
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In reply to: brumus on Monday 26/09/05 09:55am

JHX might make gains from re-building the hurricane-affected areas in the USA. However, hurricanes would also have adverse impact on the overall US economy and particularly on the present real-estate boom.

post Posted: Oct 19 2005, 02:35 PM
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In reply to: kathy on Wednesday 19/10/05 02:18pm

ok in case anyone did see my unedited post-confirmation they are ok-it is two businesses next to them
Sorry to alarm


post Posted: Oct 19 2005, 02:18 PM
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Im editing this post until I get some more info- ie confirmation

post Posted: Sep 26 2005, 09:55 AM
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In reply to: Zeus on Sunday 24/04/05 12:36am

does anybody have views on how jhx might make huge gain from the repairs re-building of hurricane affected areas in the USA

post Posted: Apr 24 2005, 12:36 AM
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In reply to: clarebatt on Saturday 16/04/05 04:16pm

JHX is down to $5.73 by 10c from $5.83 at last weekend when I put my last post ... I still strongly feel JHX has more down side. thumbdown.gif

This is because

1) The market (mainly the brokers) has grossly over-estimated the growth potential of JHX.
People usually think JHX's growth rate is ~30% pa or more. This is wrong. JHX's own guideline for this year's profit (excluding all asbestos related expenses) is USD$135-140m, which is around AUST$180m or say 39c per share, only about 10% higher than last year. Further downside risk of growth is a possible downturn in the house market in the US.

(2) The market grossly under-estimated the asbestos compensation JHX should pay.
People usually think the total amount JHX should pay is $1.5 billion. No. This is also wrong. The total amount should be 3-4 billion over the next 30-40 years, of which the "actuarial value" backdated to 31/6/2004 was $1.5 billion, or say $3.30 per share. What is a "actuarial value"? To my understanding it is a kind of valuation calculated with the method of "discounted cash flow" (DCF), which is similar to that used in estimating the intrinsic value of a stock.

Putting together the above point, I guess JHX's real value should not be over $5.00. thumbdown.gif

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post Posted: Apr 16 2005, 04:16 PM
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In reply to: Zeus on Saturday 16/04/05 04:13pm

. . . i don't see why there should be more downside on this issue.

Very small issue. . .. and the stock moved down sharply a month or so ago when they said that there was uncertainty about how claims from the B people would be treated. . . this is now resolved.

post Posted: Apr 16 2005, 04:13 PM
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In reply to: wind2close on Tuesday 08/03/05 10:58am

[CODE=wind2close,Tuesday 08/03/05 10:58am]Momentum appears to be turning? blink.gif[/CODE]

More downside it seems to me.

Article from The Austra;ian,5744,12869643%255E2702,00.html

Pressure forces Hardie backflip
Ean Higgins
April 16, 2005

JAMES Hardie Industries yesterday caved in to political and moral pressure to include a mainly Aboriginal community that mined its asbestos for more than 30 years in a $1.5 billion compensation package.

The move followed public outrage after The Australian last month revealed the people of Baryulgil, in northeast NSW, would be the only Australians excluded from the historic compensation deal struck in December between Hardie, unions, asbestos victim groups and the state Government.

In a statement yesterday, Hardie said the company would ensure legitimate asbestos disease claims from former miners and inhabitants of Baryulgil, who are mounting legal actions seeking an estimated $50 million in damages, would now be covered by the deal.

Hardie said its board had decided to extend the coverage "to allay concern among those in the Baryulgil community who may have been exposed to asbestos" as a result of Hardie's mining operations from 1944 until 1976.

Under the December provisional agreement, Hardie agreed to meet all legitimate future personal injury claims against its former Australian subsidiaries that manufactured asbestos products up until 1987.

But it left out of the deal the subsidiary that ran the Baryulgil asbestos mine under working conditions which a federal parliamentary committee found Hardie knew to be appallingly dangerous but failed to fix.

Many Baryulgil miners have died from asbestos diseases, which usually take 30 years or more to develop.

When The Australian revealed the people of Baryulgil would be excluded, Hardie refused to accept legal or moral responsibility. Company spokesman James Rickards said then Hardie was protected by "corporate veil" laws under which parent companies are not liable for physical or human damage caused by their subsidiaries.

But the company has bowed to pressure from NSW Premier Bob Carr, federal Indigenous Affairs Minister Amanda Vanstone, ACTU secretary Greg Combet, Asbestos Diseases Foundation president Barry Robson, and Australian Democrats senator Aden Ridgeway.

Mr Rickards said yesterday the people of Baryulgil had "not been on anybody's radar" when negotiations for the compensation package began in October. In fact The Australian reported in September that community leaders had little faith they would receive fair compensation.

Mr Robson said Hardie's announcement showed that "somewhere on that board of directors there is a little bit of compassion". But he said "it took public pressure and public opinion to get Hardies to the table".

The NSW Dust Diseases Board last month sent a "lung bus" to Baryulgil to test residents. Early results show some have asbestos-related diseases.

post Posted: Mar 8 2005, 10:58 AM
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In reply to: happy2 on Monday 14/02/05 03:32pm

Momentum appears to be turning? blink.gif

post Posted: Feb 14 2005, 03:32 PM
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QUOTE (Timetraveller @ Saturday 02/10/04 04:50pm)

You worry me Timetraveller. I remember you being gunho on SGW and ION, just before they crashed.

Now you are saying short on JHX. I decided you might jinx me if I shorted, so I held off. Would have been a nice short to date, too.

However, I will overlook my fears. Should see this plummet.

Have a good one

Happy 2

"Knowledge is a process of piling up facts; wisdom lies in their simplification".

Caveat Emptor: the above comments are merely opinion, not advice.

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