Rinehart Children Seek to End Mother's Control of Australia Iron Ore Trust
By Joe Schneider – Oct 7, 2011 3:44 AM ET
Gina Rinehart, Australia’s richest person, risks losing control over almost a quarter of her mining company, Hancock Prospecting Pty., as three of her children challenge her role in running a family trust.
Hope Rinehart Welker, Bianca Rinehart and John Hancock, three of Gina’s four children, sued their mother in Australian state court seeking to have her removed as trustee of the Hope Margaret Hancock Trust, New South Wales Supreme Court Judge Paul Brereton said today in dismissing Rinehart’s request to throw out the lawsuit.
The trust, created by Lang Hancock for the benefit of his grandchildren, has an almost 25 percent stake in the company he founded, holding “no small part” of the family fortune, Brereton said. Rinehart’s net worth is estimated at about $9 billion by Forbes magazine. Closely held Hancock is a partner in the Hope Downs iron ore mine in Australia’s Pilbara region with Rio Tinto Group.
“Her control won’t be affected if she is removed as trustee,” Brereton said in Sydney today. A trust deed, guaranteeing Rinehart, who is chairwoman of Hancock, control over the company “doesn’t mean the ability to control every single share,” Brereton said.
Hancock Prospecting owns iron ore projects in the Pilbara region, exporting to China, the biggest consumer. Iron ore prices reached record highs in February this year as Chinese steel production expands, building railways and apartment blocks.
Crude steel production in the world’s biggest metal consumer rose 14 percent to 58.8 million metric tons in August from a year earlier, the National Bureau of Statistics said Sept. 13.
Support From Daughter
Rinehart’s four children filed the suit against their mother in New South Wales Supreme court Sept. 5. Rinehart’s youngest daughter, Ginia, said she was wrongly included as a plaintiff and withdrew the claim. She is now a defendant in the case.
Ginia supports her mother to remain as trustee, or would want someone from outside the family to run the trust, Brereton said.
Rinehart claims a deed the children signed for the governance of the trust guarantees that disputes will be settled in private mediation or arbitration. She sought a ban on the publication of all details in the case.
She also sought to have the lawsuit thrown out and asked the judge to order the parties into mediation.
No New Claims
Brereton refused today, saying the deed over the trust doesn’t deal with new claims, made after the deed was signed in 2007 and the children’s claim could proceed in court.
The judge said he would lift the publication ban, which doesn’t apply to his decisions. However, he agreed to hear from lawyers opposed to the lifting of the ban on Oct. 14 before making the ruling final. As a result, the ban on the publication of arguments made by the lawyers, remains in place.
Rinehart became the first woman to top Forbes Asia’s list of Australia’s richest people this year as surging iron ore prices and exports more than quadrupled her fortune to $9 billion from a year earlier.
On Aug. 25, she agreed to sell coal mines in Queensland to GVK Power & Infrastructure Ltd. for $2.2 billion.
The case is Hope Rinehart Welker v Gina Rinehart. 2011/285907. New South Wales Supreme Court (Sydney).
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