Building giant in asbestos payout

Australian building products group James Hardie has agreed to pay $1.1bn (£568m) to victims of asbestos-related diseases.

The landmark deal could see thousands of people suffering from lung diseases – caused by asbestos the company once made – receive compensation.

The move follows angry protests after the firm said a previous compensation fund was running out of money.

A subsequent New South Wales state inquiry criticised Hardie’s actions.

In September, the inquiry found that the company had misled the public about the amount of money set aside to cover its asbestos-related liabilities, sparking the resignation of its then chief executive, Peter MacDonald.

Campaigners welcomed news of the preliminary agreement.

“This is a momentous day in the fight for victims and their families,” said asbestosis sufferer Bernie Banton, who leads a victims’ association. “There is still a long way to go, but we are getting there.”

James Hardie chairwoman, Meredith Hellicar, said the deal provided for a funding arrangement “that is affordable, sensible and workable”.

“At the end of the day we are dealing with compensation for people who are terminally ill. We don’t know exactly how many of them there will be, we don’t know over what exact period they will fall ill,” she said.

However, the deal still has to receive the approval of Hardie’s shareholders.

Hardie, which currently makes more than 80% of its revenues in the US, was once Australia’s biggest supplier of asbestos building materials.

In 2001, the company set up a fund to compensate asbestos victims, but it later admitted the fund was running short of money.

A decision by Hardie to move its headquarters to the Netherlands – while remaining a listed company in Australia – provoked a damaging public outcry.

Victims groups accusing it of trying to escape its responsibilities by moving abroad, a charge the company denies.

Australia’s securities watchdog is currently investigating Hardie’s former chief executive and former chief financial officer over allegations of misleading investors and the general public.