Gina Rinehart Loses Battle to Control $3.8 Billion Trust

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Billionaire Gina Rinehart
Gina Rinehart, chairman of Hancock Prospecting Pty. Photographer: Jerome Favre/Bloomberg

Gina Rinehart, Australia’s richest person, lost a four-year legal battle for control of a A$5 billion ($3.8 billion) family trust.

Her eldest daughter Bianca Rinehart will serve as trustee of the Hope Margaret Hancock Trust, Justice Paul Brereton ruled Thursday in Sydney. The trust holds 23.45 percent of closely held mining company Hancock Prospecting Pty.

“The court concluded that Bianca was better suited than any of the alternatives to administer this trust,” Brereton, of the New South Wales Supreme Court, said in his judgment.

Rinehart’s son John Hancock and Bianca Rinehart had sued their mother in September 2011, accusing her of misconduct when she sought to delay the trust’s vesting date from that month to 2068 and seeking to replace her as the fund’s trustee.

The billionaire resigned as manager of the fund in 2013, Hancock Prospecting said in an e-mailed statement. The fund was established on behalf of her four children and holds assets worth about A$5 billion, Brereton said in his judgment.

“Mrs. Rinehart has demonstrated that she is prepared to go to extraordinary lengths to retain control, directly or indirectly, of the Trust, and that she is capable of exerting enormous pressure and great influence to do so,” he said.

Three proposed trustee companies were unsuitable either as a result of their planned fees or because of uncertainty over their “robust independence from Mrs. Rinehart,” the judge said.

Much Pressure

All three licensed trustees probably didn’t “comprehend just how much pressure Mrs. Rinehart could exert were she minded to do so,” he said.

The court dismissed a claim that amendments to Hancock Prospecting’s constitution had been improperly agreed to by their mother.

“The company is pleased that the challenge to the amendments to its constitution have been rejected and that those amendments remain valid,” Hancock Prospecting said in its statement. It noted that Bianca Rinehart would be required to consult with all beneficiaries, the statement said.

Rinehart, who inherited iron ore and coal interests from her father Lang Hancock and has built a $12.6 billion fortune, is the second-richest woman in the Asia-Pacific region and 12th globally, according to the Bloomberg Billionaires Index.

Hancock Prospecting is scheduled to begin exports from Roy Hill, a $10 billion iron ore mine, from September, the first operation the family will both own and operate itself. Other interests are managed by partners including Rio Tinto Group.

Ginia Rinehart, the mining scion’s youngest daughter, had sided with her mother in the dispute. Her third youngest child, Hope Welker Rinehart, initially joined the lawsuit and later withdrew.

The case is Hancock & Rinehart v Rinehart & Ors. 2011/285907, New South Wales Supreme Court (Sydney).

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