Landmark legal action against the former board members of James Hardie begins in the NSW Supreme Court on tomorrow.
The Australian Securities and Investments Commission (ASIC) is pursuing civil penalties against 10 former directors and executives, alleging the parties misled investors over James Hardie's asbestos-related compensation payouts.
ASIC claims the case "goes to the heart of the responsibilities of directors of public companies".
Among the defendants are James Hardie's former chief executive Peter Macdonald, former chief financial officer Peter Shafron and former chairman Meredith Hellicar.
Each defendant faces maximum penalties of $200,000, if found guilty of various breaches of the corporations law and corporations act, and possible banning from managing a corporation.
ASIC launched its civil action in February 2007, following an investigation it began in late 2004, and after a NSW Special Commission found James Hardie significantly undervalued its compensation liabilities.
In 2001, James Hardie established the Medical Research and Compensation Fund (MRCF) to cover the compensation claims, handing it $293 million.
Just over two years later the foundation was in trouble, as it estimated, at the time, claims could reach above $1.09 billion.
ASIC's case will focus on alleged breaches between February 2001 and June 2003 by the company, its former subsidiary ABN 60 Pty Ltd - formerly known as James Hardie Industries Ltd - and the 10 former executives.
Earlier this month ASIC ruled out possible criminal charges against the defendants, after the director of public prosecutions said there was insufficient evidence to produce a conviction.
ASIC has called 56 witnesses for the civil hearing, which is expected to run for several months.
Among the first expected to appear before Justice Ian Gzell are former directors of the MRCF.
The Asbestos Diseases Foundation is encouraging all members, friends, supporters and families of asbestos victims to attend the hearing.
