Australian mining billionaire Gina Rinehart’s four children are free to remove their assets from a multi-billion dollar trust, making further litigation in a family dispute unnecessary, according to her lawyer.
Hope Rinehart Welker, Bianca Rinehart and John Hancock are seeking to have their 58-year-old mother removed as trustee, accusing her of misconduct by threatening their financial ruin and giving them a single day to sign an accord extending her control of the trust. Ginia Rinehart, the billionaire’s youngest daughter, is standing by her mother in the dispute.
Asia’s richest woman vested the trust on April 30, effectively allowing the children to take control of their assets instead of having to wait until 2068. Rinehart’s three oldest children said they will continue the court case to remove her as trustee and can’t decide whether to take ownership of their assets because they don’t know the tax implications, the Sydney Morning Herald reported yesterday.
Rinehart “waits for the beneficiaries to call for the trust assets,” her lawyer, Paul McCann, said by e-mail today. “You have to question any need for the litigation to continue, unless they wish to cause more problems for Mrs. Rinehart” or Hancock Prospecting Pty, her closely-held company.
Mark O’Brien and Andrew Bell, the children’s lawyers, didn’t immediately respond to Bloomberg requests for comment.
Rinehart has an estimated net worth of $18.3 billion, with the majority held in Hancock Prospecting, according to the Bloomberg Billionaires Index, making her the 34th richest person in the world.
The Hope Margaret Hancock Trust was created by Rinehart’s father, Lang Hancock, for the benefit of his grandchildren. According to court documents, the trust holds 23.45 percent of the voting shares of Hancock Prospecting, which owns stakes in some of the biggest coal and iron-ore mining projects in Australia.
Jay Newby, chief financial officer of Hancock Prospecting, calculated the value of each child’s share of the trust at A$600 million, based on an estimate of Rinehart’s wealth of A$10.3 billion, according to an e-mail filed in court documents. Rinehart’s net worth of $18.3 billion would value each child’s stake at about $1.07 billion.
Capital Gains Tax
A withdrawal of the assets would result in a A$253 million tax bill against each of the children, based on Newby’s calculations.
In their lawsuit, the children noted their mother unilaterally extended the vesting date in September to 2068, saying they would face bankruptcy because of the capital gains taxes that would be assessed against them.
The case is Hope Rinehart Welker v Gina Rinehart. 2011/285907. New South Wales Supreme Court (Sydney).