Hanson faces $200m California suit

BUILDING materials giant Hanson has been hit by a $200m (£119m) legal claim from the near-bankrupt state of California for allegedly underpaying royalties to dredge sand in San Francisco Bay.

The lawsuit, which Hanson is fighting, comes at an awkward time for the company. It is already facing hundreds of millions of pounds in US asbestosis claims and was forced to raise provisions against future liabilities from $215m to $320m earlier this year. Hanson has also suffered from rising pension provisions and the impact of a weak dollar.

The latest blow stems from allegations that several Hanson subsidiaries wrongfully calculated royalties due to California under dredging rights covering thousands of acres in the bay.

The suit, filed on Friday, said that since 1993, Hanson had manipulated sales prices reported to California in order to reduce payments. The company is also alleged to have under-reported the amount of sand extracted and mined land outside its lease areas.

Hanson said California Attorney General Bill Lockyer was adopting a stance 'inconsistent' with standard mineral royalty procedures. It said California's authorities had given its method of calculating royalties a clean bill of health after an audit two years ago.

'Consequently Hanson does not believe that there are adequate grounds to support the allegations, or the amount of damages being sought,' the company added.

Hanson shares opened steady at 404 3/4p.