Hardie Confident Shareholders Will Approve Asbestos Fund

November 15, 2006 - James Hardie Corporation executives in Australia told the Sydney Morning Herald that they believe their shareholders stand firmly behind the approval of a new asbestos fund, which will finally allow asbestos sufferers to begin receiving compensation for their injuries.

Company CEO, Louis Gries, released a statement yesterday, saying, "We communicate with our shareholders on a regular basis and I think all stakeholders have indicated they think this is a good resolution."

The compensation fund, which will be addressed and voted upon at a February 2007 shareholders meeting, needs to be approved by 50 percent of those who choose to vote.  About 85 percent of Hardie's shares are held by institutional investors, Gries told the media.

After much ado with the Australian Tax Office, Hardie reached a deal last week rthat will allow them to avoid paying taxes on the monies deposit into the fund. 

"A dollar of payment by James Hardie will result in a dollar of payment to claimants," CFO Russell Chenu said, without any of the money going "to benefit Federal Government revenue".

"What we were seeking to achieve was a position that was identical with or very similar to charitable status," Chenu added, but declined to give details.  Lawyers contacted by the Herald said it was likely “the relationship between the new fund and two former asbestos-producing subsidiaries of Hardie had been restructured so the subsidiaries' tax losses could be offset against the fund's investment income.”