The New South Wales Supreme Court will today decide whether former James Hardie executives and directors should be punished for issuing false and misleading statements about the company's ability to fund asbestos compensation.

The case was brought by the Australian Securities and Investments Commission (ASIC), which is calling for steep fines and long disqualifications for former company officers including former chief executive Peter Macdonald.

Mr Macdonald faces a fine of up to $1.8 million and being disqualified from being a company director for up to 16 years.

Peter Shafron, the former company secretary, faces a fine of up to $450,000 and disqualification for a minimum of eight years.

ASIC has called for former non-executive directors, including former chairwoman Meredith Hellicar, to be disqualified for five years and be fined up to $130,000.

In April, Supreme Court judge Ian Gzell found the 10 former company officers had breached corporate law in 2001 when they claimed in statements to the stock exchange and in a press release that a trust set up to compensate victims of asbestos-related diseases had adequate funding, when it did not.

Justice Gzell labelled Ms Hellicar as a "most unsatisfactory witness".

The former company officers argue they have been punished enough by the adverse publicity the case has attracted.

They have had strong support from prominent Australians, including former Labor foreign minister Gareth Evans and Telstra chairwoman Catherine Livingstone, who are among the referees.

In the Supreme Court last month, Tony Meagher SC, for James Hardie, argued the breaches of the Corporations Act were at the "low end of the spectrum".

In a swipe at ASIC, he said the allegations were "arrived at by lawyers working in a dark room".

ASIC says the court ruling provided boardrooms with important guidance and direction.

Presenting ASIC's submission to the court at a penalty hearing last month, Tony Bannon SC said: "Faced with a high-stakes decision, the board and the management were found wanting".

After the judgement in April, Ms Hellicar and another former Hardie boss, Peter Willcox, announced they would step down from their board positions.

Funds running short

The case in many ways has been a Pyrrhic victory for victims of asbestos-related diseases who were exposed to James Hardie products.

The trust fund set up by James Hardie to pay victims will run out of money in early 2011 and the company says it cannot afford to make payments this year because of the global economic downturn.

The fund has asked for an emergency loan from the New South Wales and federal governments.

On Tuesday, James Hardie chief executive Louis Gries said the company would fulfil all its obligations to asbestos victims and any loan taken out by the fund would be repaid by James Hardie.

The building materials maker made a $95 million loss in the three months to the end of June but is hopeful the US housing market has bottomed.

It plans to relocate from Ireland to the Netherlands to save on tax bills if the shareholders approve the move. The company says it faces tax penalties of $US50 million every year if it remains in the Netherlands with the US as its main market.

The relocation will reduce payment to the compensation fund by $US15 million.

Mr Gries said he was optimistic James Hardie would be able to resume payments to the fund next financial year if the US economy recovered.

Mr Gries joined James Hardie in 1991 and became chief executive in 2005.

In an interview with the ABC, he refused to pass judgement on the way the former executives and directors handled asbestos compensation.

"When I took over corporate, I understood it was my job to manage the future; I'm not about managing the past," he said.

"That's not my job to decide what was done in the past is right or wrong, it's my job to try and do what's right in the future."

The case is likely to be appealed by the defendants.