Now that the final written submissions to the James Hardie commission of inquiry have been received, it seems the corporate scandal is shaping up to rival the HIH collapse. Like HIH, it involves billions of dollars and allegations of management wrongdoing.

Counsel assisting the commission, John Sheahan, SC, has recommended several prosecutions but whether they are pursued will depend on the commission’s recommendations. Mr Sheahan said the company had a culture of secrecy and showed disdain for genuine victims of diseases caused by its products.

The company’s liabilities have blown out to $2.24 billion. Top executives are facing allegations that they not only breached the law but also adopted a strategy to limit the assets available for asbestos compensation cases.

It is also alleged that actuary Trowbridge Deloitte engaged in misleading conduct, exposing it to damages claims of up to $120 million, and that law firm Allens Arthur Robinson failed to exercise due care in advising its client.

State governments across Australia, with NSW spearheading the campaign, are calling for the Commonwealth to reform the law and expand the liability of companies in relation to negligence claims against their subsidiaries.

It seems the states want to prevent a repeat of the crisis facing asbestos victims. Such people may not be able to pursue James Hardie in relation to the liabilities of its former subsidiaries, which have a huge funding shortfall.

Speaking on Channel Nine’s Business Sunday, Australian Stock Exchange (ASX) CEO Richard Humphry said the ASX will carry out its own investigation into James Hardie Industries.

He said the focus is on the continuous disclosure rule. The ASX is concerned about possible failure by James Hardie to make statements, and any implications for keeping the market adequately informed.

Mr Humphry said formal prosecution would be a matter for the Australian Securities and Investments Commission, but the ASX may be involved as co-regulator.