Family feud: Gina Rinehart loses control of $5 billion family trust to children
Friday, May 29, 2015/
Australia’s richest person, Gina Rinehart, has lost her long-running legal battle with her children over control of the family trust set up by her late father, mining magnate Lang Hancock.
The NSW Supreme Court yesterday ruled in favour of Rinehart’s eldest daughter Bianca, handing her control of the family’s Hope Margaret Hancock Trust, estimated to be worth between $4 billion to $5 billion.
The hit to her hip pocket comes as Rinehart was again named the country’s richest woman, topping the BRW Rich List for the fourth year in a row. She was also the only Australian woman to make this year’s Forbes World’s 100 Most Powerful Women list earlier this week.
However, the ruling has put Rinehart’s top position on the Rich List in doubt, as this year’s rankings were finalised before the outcome of the case was known.
Bianca Rinehart, her brother John Hancock and sister Hope Welker began battling their mother for control of the trust in September 2011. In October 2013, Rinehart voluntarily relinquished the role of trustee before the hearings began.
Ginia Rinehart, the youngest of the Rinehart children, was the only sibling to initially side with her mother, but Welker last year accepted a $45 million deal with her mum to drop out of the legal battle.
The dispute came to an end yesterday, when Justice Paul Brereton handed down his judgment, finding Bianca Rinehart was best suited to head up the family trust, which holds a 23.4% stake in Hancock Prospecting.
“While Bianca’s appointment is not ideal, in particular because she is a beneficiary, with consequent potential for a conflict of interest and duty, and that she does not have the knowledge and experience of a professional trustee, it is far less unsatisfactory than the alternatives,” Brereton says.
He said in the course of the litigation, Rinehart had “repeatedly, directly, or through her lawyers, or through other influential connections, sought to deter the plaintiffs from prosecuting it, by measures some of which closely approach intimidation”.
“Mrs Rinehart has demonstrated that she is prepared to go to extraordinary lengths to retain control, directly or indirectly, of the Trust, and that she is capable of exerting enormous pressure, and great influence, to do so, and to secure the appointment of a trustee acceptable to her,” he continued.
“I have never seen such pressure exerted, so persistently, on a litigant, as has been apparent in this case.”
Brereton ordered Gina Rinehart to deliver the trust documents to her daughter.
Fairfax this morning reported the judgment will not be the end of Rinehart’s legal woes, with another case set for Federal Court later this year, which will look at the transfer of Hope Downs and Roy Hill tenements into Hancock Prospecting and the reduction of the trust’s shareholding in HPPL.
Hancock Prospecting issued a statement to SmartCompany that said the company was “pleased that the challenge to the amendments to its constitution have been rejected and that those amendments remain valid.”
“We note that the Trustee will be required to consult with all beneficiaries and get the advice of the Court,” Hancock Prospecting added.