Gina Rinehart’s child drops legal action because she is broke

One of Gina Rinehart’s children has dropped out of her litigation against Australia’s richest person, leaving her two siblings to carry on with the legal action alone.

Rinehart has reached a settlement with her daughter Hope Welker, who has split with her husband and was struggling to support her two young children in New York without an income.

According to a report in The Age, Welker wrote to her mother days before Christmas seeking a settlement.

Welker also wrote to her half-brother, John Hancock, and half-sister, Bianca Rinehart, informing them of her decision to withdraw from the litigation that the three children had launched in September.

The litigation sought to remove the mining magnate as trustee from the Hope Margaret Hancock Trust, which controls the Rinehart fortune, alleging ”deceptive, manipulative and disgraceful conduct”.

Rinehart hit back, saying her children, “who either do not work, or do not work full-time“, should stop any action against her.

The trust was set up in 1988 to hold the shares their grandfather and grandmother had left to them. It currently holds just under 25% of Hancock Prospecting, which includes a 50% stake in the iron ore company Hope Downs.

Gina became trustee of the discretionary trust when her father died in March 1992 and it was set to vest in September 2011, when Rinehart’s fourth and youngest child, Ginia Rinehart, turned 25.

But Rinehart and her children agreed in 2006 to extend the vesting date of the trust and Ginia chose not to participate in the subsequent litigation, siding with her mother.

Welker is expected to apply for leave to withdraw from the case on March 12, when a directions hearing is set.

Emails obtained by The Age reveal Hope’s husband, Ryan Welker, believes he was forced to resign from the board of Mineral Resources in October 2011 after he was appointed as a director in 2010.

The day before Welker’s resignation from Mineral Resources – and three weeks after legal action was launched against Rinehart – executive director Chris Ellison said:

”We are getting serious heat from HPPL on the board position and they will soon have it all over the media, which I can’t afford, and I hope you understand I have enjoyed having your support and, as a director and friend, hope you understand – I just don’t want MRL caught up in a bloodbath, Chris.”

On January 4, 2013, Hancock Prospecting announced it had ceased to be a substantial shareholder, selling almost 15 million shares in Mineral Resources.

The Australian reports Welker and her husband have been struggling financially for more than a year, liquidating their assets to fund $400,000 in legal bills and to cover living costs.

“Hope is completely broke,” a source close to the family told the newspaper.

In an email sent in September 2011, Welker told her mother that she could not afford to pay for a cook, housekeeper or bodyguard because “I’m down to my last $60,000”.

“I should have enough money to have a bodyguard, housekeeper and cook,” she wrote.

“Even my friends who have nothing compared to your wealth have more staff.”

This article first appeared on LeadingCompany’s sister site, SmartCompany


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