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Tim Bednall
Partner
Tim Bednall
Partner
T +61 2 9296 2922
Sydney
Tony Bancroft
Tim Blue
David Friedlander
Kate Mills
Melbourne
Alison Lansley
Stephen Minns
Diana Nicholson
Perth
Nigel Hunt
Brisbane
John Humphrey
Seven former non-executive directors and three former senior executives of James Hardie Industries Limited have today been ordered to pay a pecuniary penalty and banned from managing a corporation (including being a company director) for their roles in the release of a misleading ASX announcement.
The penalties appear to be relatively harsh in the circumstances. While the decision may be seen as adding to confidence in an already strong culture of market integrity in Australia, it is also likely to add to current concerns about the market consequences of increasingly onerous obligations on company directors.
We invite you to contact any of the Mallesons partners listed on this alert, if you wish to discuss the implications of the judgment for directors and executives of your company.
Details of the penalties
The New South Wales Supreme Court has imposed a pecuniary penalty of $30,000 on each of the former non-executive directors of JHIL, and banned them from managing a corporation for 5 years.
The former CEO was penalised $350,000 and banned for 15 years, the former general counsel was penalised $75,000 and banned for 7 years, and the former CFO was penalised $35,000 and banned for 5 years.
In addition, Hardie Industries NV has been penalised $80,000.
The parties will now consider whether to appeal the decisions of the court on liability and penalties.
Our analysis of the court’s judgment on liability is available on our website.
Mallesons is acting for James Hardie Industries NV in these proceedings.