Rinehart Moved Trust Vest Date by 50 Years to Force 3 Estranged Kids to Work
More details of the Rinehart family court battle are coming out following the decision by the High Court to deny the request of Australia and Asia's richest woman, Gina Rinehart, to suppress publication of the details of their feud.
The publicised details include astounding numbers involving the family trust and how the feud has widened the gap between Ms Rinehart and her three estranged children.
Hancock Prospecting Chief Financial Officer Jay Newby estimated the share of each Rinehart children in the family trust at $632 million each based on the A$10.3 billion net worth then of Ms Rinehart in September 2011.
If the figures were adjusted to reflect Ms Rinehart's current net worth of $20.2 billion, the stake of each child in the trust would go up to $1.18 billion.
At the time that the Hope Margaret Hancock Trust, established in 1988 by Lang Hancock, was supposed to vest on Sept 6 - the 25th birthday of youngest child Ginia - the trust was estimated at $2.4 billion. However, reports indicated that Ms Rinehart emailed her children a day before the trust would vest to warn them that they would become bankrupt if they took the money immediately due to the capital gains tax.
She instead asked them to sign an agreement that would make give her long-term control over the trust. Reports also said that Ms Rinehart changed the vesting date by 50 years later to July 1, 2068. Ms Rinehart pointed to PricewaterhouseCoopers as the source of the bankruptcy advice, however three of her estranged children claimed that their efforts to get more details of the accounts were denied.
Ms Rinehart also explained that the changes were needed and would be in the best interest of the beneficiaries because delaying the release of their money would "force them to go to work and reconsider their holidaying lifestyles and attitudes."
Due to her action, John Hancock, Hope Rinehart Welker and Bianca Rinehart petitioned the court to remove their mother as the head of the family trust. Bianca said that Mr Newby emailed her on Sept 6 to offer her quarterly payments if she would immediately drop the case against Ms Rinehart.
In asking for Ms Rinehart's removal as head of the family trust, the three cited misconduct by her threatening their financial ruin and giving them only one day to sign an agreement that would extend her control over the trust.
However, Paul McCann, Ms Rinehart's lawyer, said suggestions that the iron ore billionaire threatened her three children with bankruptcy are incorrect and offensive.
The battle for control over the trust, which holds 23.45 per cent of the voting shares of Hancock Prospecting, aims to assure that Ms Rinehart retains full control of the company which has 6,000 voting shares of which she hold 4,593. However, a change in the head of the trust which holds 1,407 voting shares would substantially water down control of Ms Rinehart over Hancock Prospecting.
Ms Rinehart is doubtful of the skill and work ethics of her three older children to be in charge of their trust fund.
According to a settlement signed with John Hancock in 2007, Ms Rinehart said she intends her four children to inherit all her shares in Hancock Prospecting and would provide for the appointment to the child who has shown interest in affairs relating to the Hancock Group and who can be trusted.
However, Ms Rinehart insisted none of her three children "has the requisite capacity or skill nor the knowledge, experience, judgment or responsible work ethic to administer a trust."
Ginia has sided with her mother and echoed Ms Rinehart's argument that none of her siblings qualified to administer the trust. MPs Barnaby Joyce and Alby Schultz have also attempted to interfere in the family feud by attempting to convince Hope to drop the court case against her mother.
In an email to Hope of Sept 11, Mr Joyce wrote: "You are a family Australia needs.... All good families have their problems but before it gets really out of hand, I would try to get it back in house and out of the public view."
However, Mr Joyce told ABC: "I suppose it's an approach to try and as much as possible throw oil on troubled waters. If you can at all have some capacity to be a peacemaker then I suppose that's what you should do. Obviously it didn't work - that's life."