ID :
22035
Wed, 10/01/2008 - 00:58
Auther :
Shortlink :
http://m.oananews.org//node/22035
The shortlink copeid
James Hardie defends its compo estimates
A NSW Supreme Court trial of 10 former directors and executives of building product company James Hardie has heard the company's estimates of its asbestos compensation liabilities were sound.
The Australian Securities and Investments Commission (ASIC) is suing the former James Hardie management for allegedly misleading investors about the company's ability to fully compensate asbestos victims.
ASIC claims misleading statements were made in 2001 when the company set up the Medical Research and Compensation Foundation (MRCF) to cover its compensation liabilities.
In the witness stand on Tuesday, Peter Jollie, a director of the MRCF when it was established, was questioned about a meeting he attended with James Hardie Chief Financial Officer Peter Morley in February 2001. Mr Jollie said he was told by Mr Morley that at least $210 million in James Hardie assets would be made available to the MRCF.
Mr Morley explained his cash flow models to the meeting, which was also attended by other directors of the trust.
Mr Jollie told the court Mr Morley had based the 11.2 per cent interest rate on cash investments on the previous five years experience with James Hardie's superannuation funds. "It was not my understanding that he considered them on future rates of appropriate
interest, but it was to the rates over the last five years."
Also in the stand was David Minty, a consultant with the firm that provided a series of estimates to James Hardie on its likely compensation liability. Despite telling the court that he wrote two reports in 2001 using claims data updated only to March 2000, Mr Minty said he was confident he was still producing the most likely outcome.
The 10 defendants face maximum fines of $200,000 and possible bans from managing a
corporation if found guilty.
The trial continues.
The Australian Securities and Investments Commission (ASIC) is suing the former James Hardie management for allegedly misleading investors about the company's ability to fully compensate asbestos victims.
ASIC claims misleading statements were made in 2001 when the company set up the Medical Research and Compensation Foundation (MRCF) to cover its compensation liabilities.
In the witness stand on Tuesday, Peter Jollie, a director of the MRCF when it was established, was questioned about a meeting he attended with James Hardie Chief Financial Officer Peter Morley in February 2001. Mr Jollie said he was told by Mr Morley that at least $210 million in James Hardie assets would be made available to the MRCF.
Mr Morley explained his cash flow models to the meeting, which was also attended by other directors of the trust.
Mr Jollie told the court Mr Morley had based the 11.2 per cent interest rate on cash investments on the previous five years experience with James Hardie's superannuation funds. "It was not my understanding that he considered them on future rates of appropriate
interest, but it was to the rates over the last five years."
Also in the stand was David Minty, a consultant with the firm that provided a series of estimates to James Hardie on its likely compensation liability. Despite telling the court that he wrote two reports in 2001 using claims data updated only to March 2000, Mr Minty said he was confident he was still producing the most likely outcome.
The 10 defendants face maximum fines of $200,000 and possible bans from managing a
corporation if found guilty.
The trial continues.
