Oct. 31 (Bloomberg) -- Gina Rinehart, Asia’s richest woman, lost a bid to have a lawsuit by three of her children over their multibillion-dollar family trust thrown out.
New South Wales Supreme Court Justice Paul Brereton today rejected Rinehart’s request to dismiss the case and also granted the children leave to amend their claims.
Hope Rinehart Welker, Bianca Rinehart and John Hancock sued their 58-year-old mother in the Australian state court in September 2011, accusing her of misconduct by threatening their financial ruin and breach of trust. They want her removed as trustee of the Hope Margaret Hancock Trust, which holds a $4.5 billion stake of iron ore and coal developer Hancock Prospecting Pty.
Gina Rinehart hadn’t shown that their case was doomed to fail, the judge ruled.
“Of course, that is not to say that the plaintiffs will necessarily prove their allegations,” Brereton said. That can only by resolved at trial.
An e-mail to Perth-based Hancock Prospecting Pty, Gina Rinehart’s closely held company, seeking comment on the court decision wasn’t immediately answered.
Gina Rinehart inherited iron-ore mining assets from her father, Lang Hancock, and has an agreement with Rio Tinto Group under which she collects royalties on properties in Western Australia mined by Rio. She’s ranked 37th wealthiest person in the world by the Bloomberg Billionaires Index, with an estimated net worth of $18.6 billion.
Ginia, her youngest child, has sided with Gina Rinehart in the dispute.
Welker, Bianca and John Hancock accused their mother of threatening their financial ruin if they didn’t extend her control of the trust.
“At the core of this are allegations that, as the vesting date approached, she misrepresented to the beneficiaries that they would incur capital gains tax liabilities with catastrophic financial consequences for them,” Brereton wrote in his 12-page ruling.
While Gina Rinehart has announced that she is prepared to transfer shares to the beneficiaries when called to do so, that doesn’t necessarily extinguish any concern that might arise from her past alleged behavior, Brereton said.
Gina Rinehart’s children are planning to ask for the return of trust moneys which she may have used to fund her defense in this case, the judge said, allowing them to amend their complaint.
The court case was important to the future of Hancock Prospecting, John Hancock said in an e-mail responding to Bloomberg requesting comment.
“Its the future of the family company, including beneficial shareholders whose interests are managed by the Trustee,” he said.
The case is Hope Rinehart Welker v Gina Rinehart. 2011/285907. New South Wales Supreme Court (Sydney).
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