James Hardie Industries SE shares gained almost five per cent after a successful appeal to the Full Bench of the Federal Court over a tax matter worth over $242 million.
The legal battle relates to RCI Pty Ltd, a subsidiary of James Hardie, and taxes paid in the fiscal year to March 1999.
RCI was issued with an amended tax assessment for the year in 2006, to which it objected.
The objection was disallowed by the Australian Taxation Office (ATO), and a subsequent appeal to the Federal Court by RCI was also rejected.
RCI then appealed to the full Federal Court and, after a hearing in May, Justice Richard Edmonds, Justice John Gilmour and Justice John Logan on Monday found in favour of RCI.
Their ruling overturns Federal Court Judge Margaret Stone’s rejection of RCI’s appeal in September last year.
If ATO does not elect to seek leave to appeal the ruling, the ATO will be obliged to refund $242.4 million, plus interest and a portion of RCI’s legal costs, James Hardie said.
The ATO has 28 days to lodge an appeal.
James Hardie shares were placed in a trading halt before the court’s judgment was delivered.
After resuming trade, they hit a high of $5.47 before closing up 25 cents, or 4.8 per cent, at $5.46.
The company said if it received the tax refund before the end of its current fiscal year, which ends on March 31, 35 per cent of the amount would be paid as a contribution to the Asbestos Injuries Compensation Fund in July 2012.
