Rinehart Trust Shuffle Acronym Sparks New Spat With Son
An abbreviation in an Australian Securities & Investments Commission filing, outlining the transfer of shares from a disputed multibillion dollar trust, set off a new tiff between representatives of Asia’s richest woman and her son, who is suing her for control of the holdings.
Gina Rinehart transferred 51,584 shares to a company named GH Rinehart as Trustee for the Hope Margaret Hancock Trust from a unit of the trust on April 26, 2012. The transfer in ASIC was identified with the letters DRP, which usually stands for a dividend reinvestment plan, prompting her son, John Hancock, to say that would hurt the beneficiaries.
“If there really is a dividend reinvestment plan (I’ve never heard of this, it’s not happened before and I would ask why now) this is against the interest of the beneficiaries who have not received anything from the trust since the litigation started,” Hancock wrote yesterday in an e-mail.
The letters DRP might have been mistakenly used instead of DPR, which might be a preferred-share class code, Jay Newby, chief financial officer at Rinehart’s Hancock Prospecting, said yesterday in an e-mail after Hancock’s reaction.
“I can assure you there is no ‘Dividend Reinvestment Plan,’” Newby said. “One might assume that ‘D class Preference’ shares could be abbreviated as DPR, which is similar to DRP.”
ASIC’s press office didn’t immediately respond to an e-mailed request for comment on the coding, sent after regular business hours in Sydney.
Hancock and his sisters Bianca and Hope Rinehart Welker sued to remove their mother as trustee of the multibillion-dollar trust in September 2011, claiming she breached her duty and failed to act honestly.
Welker pulled out of the lawsuit earlier this year and is now named as a defendant. Ginia, the youngest of Gina’s four children, has sided with her mother since the suit was filed.
Included in the trust is a 23.5 percent stake in Hancock Prospecting, Rinehart’s iron ore company, which collects royalties from Rio Tinto Group (RIO) operations and is building the first mine it plans to operate on its own.
Based on current valuations, the trust holds almost a quarter of Rinehart’s estimated net worth of $19.5 billion, according to the Bloomberg Billionaires Index, which ranks her as the world’s 36th richest person.
The transfer of the 51,584 shares was disclosed in a May 29 filing with ASIC. A day after that transfer in 2012, Rinehart moved two shares of the trust to Hancock Prospecting Pty, a separate filing showed. The share transfers occurred days before Rinehart allowed the trust to vest on April 30, 2012.
The two shares were transferred at the market value of the company’s assets, which consisted of about A$10,000 ($9,581) worth of shares in publicly listed companies, Newby wrote.
“The funds remain in the trust -- there is no disadvantage to the beneficiaries,” Newby said. The 51,584 D class preference shares also remain beneficially owned by the beneficiaries of the trust, he said.
Hancock, informed of the apparent typographical misunderstanding, said he remains puzzled by the transfers.
“What was the impetus” for them, Hancock asked today in an e-mail. “Strange timing.”
Rinehart had previously pushed back the vesting date to 2068 without notice to the children, after they refused to agree to the extension without further information, according to an amended statement of claim filed May 23 in the Supreme Court of New South Wales in Sydney.
She insisted on the extension, falsely stating that not doing so would lead to the children’s bankruptcy, according to the filing. She also urged them not to verify their initial statement of claim, writing in a Nov. 16 letter, “If you verify under oath such statement, that will be held against you all your life,” according to the filing.
Hancock, who adopted his grandfather’s last name in 2003, had agreed in 2005 to drop claims against his mother and her company. In exchange, he received A$398,125 in lieu of any distributions from the trust before it was originally due to vest in 2011, on Ginia’s 25th birthday.
“Our mother is trustee of the trust our grandfather set up for his grandchildren’s support and benefit” and controls the family company Hancock Prospecting, Hancock wrote in the e-mail. “She also chooses who does or doesn’t work within the company and their salaries, including the beneficiary family members.”
The case is John Langley Hancock v. Gina Hope Rinehart. 2011/285907, New South Wales Supreme Court (Sydney).
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