Hardie Chairwoman and Others Resign Over Asbestos Suits

February 20, 2007 - Meredith Hellicar, the embattled James Hardie Industries chairperson, quit this week after being sued by Australia's securities regulator for misleading investors over the cost of compensating people sickened by asbestos, reports Bloomberg.

Michael R. Brown and Michael Gillfillan also quit, a spokesperson for James Hardie reported on February 20.  John Barr was named acting chairman of the board.

The Australian Securities and Investment Commission is hoping to have Hellicar, Brown, and Gillfillan – along with the company’s other directors – banned from running a public company for “breaching their duties” as directors.  Hellicar also currently sits on the board of AMP, one of Australia’s largest life insurance companies.

“For me to stay on the board may create perceptions that the board is affected by conflict of interest,'” Hellicar said in her letter of resignation. She added that she was ``confident'' she had fulfilled her duties at chairman of the board. 

The suit centers on a Feb. 16, 2001 press release when James Hardie said a newly created $293 million fund was “sufficient to compensate victims of asbestos poisoning.” Further research and investigations by the government determined that a fund of that size would run out in just 3 years.  The company was then forced to set up a $1.6 billion compensation fund instead.  Shareholders approved the fund earlier this month and recently made the first deposit of $184 million. 

“I am immensely proud of our asbestos settlement,” Hellicar wrote in her resignation letter.