Oct. 11 (Bloomberg) -- Gina Rinehart’s $4 billion family trust is without a nominee to replace her as manager after a judge rejected a proposal from her youngest daughter Ginia Rinehart and her son withdrew a nomination for himself and his choice of an independent candidate.
John Hancock and his sister Bianca Rinehart sued their mother in 2011, accusing her of misconduct and sought to replace her. Gina Rinehart agreed to step down last week, ahead of a trial that began Oct. 8 to determine her successor.
New South Wales Justice Paul Brereton yesterday rejected a proposal to nominate Bianca Rinehart and today he turned down a bid from Ginia Rinehart, saying both ideas would lead to an “unacceptable” delay in the trial. Hancock then withdrew his nomination as well as that of Bruce Carter, an Adelaide businessman he had proposed, leaving the judge to choose a trustee on his own.
“Your honor has no one,” to choose from, Christopher Withers, lawyer for John Hancock and Bianca Rinehart, said at today’s hearing.
Lawyers plan to spend the weekend working up alternate proposals for Judge Brereton, with Richard McHugh, Ginia Rinehart’s lawyer, saying he would suggest Perpetual Trustee Co., a unit of investment advisor Perpetual Ltd., to name a manager for a company that would own the trust holdings.
Withers had earlier rejected McHugh’s proposal for a unit of National Australia Bank to manage the company proposed by Ginia Rinehart, saying it’s involved in financing Hancock Prospecting Pty’s Roy Hill mine development.
John Hancock, Bianca Rinehart and Hope Welker Rinehart sued in September 2011 accusing their mother of misconduct when she sought to delay the trust’s vesting date from that month to 2068. The trust holds almost a quarter of Hancock Prospecting, an iron ore and coal company Gina Rinehart inherited from her father Lang Hancock and built into an $18.3 billion fortune, making her the 41st richest person in the world, according to the Bloomberg Billionaires Index.
Hope Welker Rinehart has withdrawn from the lawsuit.
Gina Rinehart changed the rules governing the trust in 2006 for her own benefit, breaching her duty as trustee, by prohibiting non-family members from holding shares of Hancock Prospecting or managing the trust, Withers said yesterday.
That’s an “absurd proposition,” Gina Rinehart’s lawyer Noel Hutley said today.
Gina Rinehart, with 75 percent of the holdings in Hancock Prospecting, is most at risk if she tries to dispose of her shares to retire and use her money for philanthropy, Hutley said.
She’s been “selfless to the extreme” in drafting the succession plans for her company, Hutley said.
The case is John Langley Hancock v. Gina Hope Rinehart. 2011/285907, New South Wales Supreme Court (Sydney).
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