Banning nine blokes and former James Hardie chair Meredith Hellicar for a cumulative 62 years was a pretty good effort by Justice Ian Gzell, but the total fines of $750,000 clearly fell well short of the mark.
The gang of ten, average age 60, have had their public company careers ended.
However, the collectivist approach for the seven non-executive directors surprised many. Where was the additional penalty for the chair as we saw in 2004 when former One-Tel non-executive chairman John Greaves copped a four-year ban and a $20 million compensation bill which sent him broke?
When ASIC did its sweetheart deal with Steve Vizard a couple of years later, Greaves was privately scathing, labelling Australia’s justice system inconsistent and third world.
There’s a simple answer why Hellicar got the same five-year ban and pathetic $30,000 fine as the other non-executive Hardie directors — she wasn’t chairman in 2001 and 2003 when the two asbestos dodges were executed.
Alan McGregor’s name has barely been mentioned in the media since he died of cancer in February 2005 but there is something wrong with his family still swanning around with an estimated $50 million.
McGregor was an absolute pillar of the conservative business establishment. Educated at Geelong Grammar and Cambridge University he joined the James Hardie board in 1989 and was chairman from 1995 until August 2004, one month before the damning Jackson Inquiry report was released.
When McGregor died, his 8.6 million James Hardie shares (see page 61 of 2004-05 Annual Report) were worth almost $60 million. As chairman of the company, he could have snuffed out the whole sordid exercise but instead he conducted a rather large orchestra of co-offenders and had a huge financial incentive to do so.
It was McGregor who was captain of the ship all the way through, leading the process to dispose of former CEO Keith Barton in 1999 and replace him with the dodgy Peter MacDonald.
And McGregor knew plenty about PR, government policy and public companies given he spent 12 years as chairman of the Centre for Independent Studies, three years on the ASX board and also chaired FH Faulding and Burns Philp.
That said, the notorious press release on February 16, 2001, carried the name of Greg Baxter on it and he clearly did such a great job leading the spin campaign that the 2003 James Hardie annual report included the following on page 26:
Greg Baxter, Executive Vic President, joined James Hardie in November 1996.
Greg is the company’s senior Australian resident executive and his role involves strategic planning, corporate and public affairs, investor and media relations and government relations and corporate development projects.
He was a founding director of the Australasian Investor Relations Association and was voted Australian Investor Relations Officer of the Year in 2001, and again in 2002, when James Hardie also won the Grand Prix for Best Overall Investor Relations by an ASX-100 Company.
Nine months later in March 2004 with the Jackson Inquiry already established, Baxter left for News Ltd and CEO Peter MacDonald — now disgraced, banned for 15 years and fined $350,000 — lauded him for being “instrumental in developing the high standards of disclosure and communication for which the company now enjoys a strong reputation”.
Contrast Baxter with poor old Dan O’Brien — arguably the least deserving of the “Hardie 10”. O’Brien only formally replaced then Brierley Investments chairman Sir Selwyn Cushing as a Hardie director on April 4, 2001 — two months after Baxter claims he took that press release to the February 15 board meeting.
Whilst O’Brien did attend some earlier meetings as an alternate director — see EIisabeth Sexton’s excellent piece in April — he resigned on just his 54th day as a full director on May 28, 2001 after Brierley dumped its controlling 29% stake for $550 million.
With Baxter the most senior Australian-based Hardie executive, this presentation blathered on using words such as “fair … legitimate … transparent … resolved … no future provisions … no distractions for management”.
As we wrote in Crikey after Justice Gzell’s original judgment in April, it is remarkable that Greg Baxter is still Rupert’s chief Australian spindoctor six years later when most of the other people involved are disgraced, dead or unemployable.