Rinehart Seeks Three Fairfax Media Board Seats, Herald Says
Gina Rinehart, Asia’s richest woman, is seeking three seats on the board of Australia’s second- largest newspaper publisher, Fairfax Media Ltd. (FXJ), and the ability to fire editors, the Sydney Morning Herald reported.
Rinehart yesterday raised her stake in Fairfax, the publisher of the Herald, Melbourne’s Age and the Australian Financial Review, to 19 percent, as the company announced it’s cutting 22 percent of its workforce in a bid to halt sliding revenue and a stock price slump.
Gaining board seats and influencing editorial policies at Fairfax may help the 58-year-old mining magnate widen her political clout as she criticizes taxes on mining profits and carbon emissions and calls for less government involvement in the economy.
“She discovered the power of the media during her successful campaign against the mining tax,” David Rowe, a professor at the University of Western Sydney’s Institute of Culture and Society, said in a phone interview today. “Newspapers may be declining in sales but they still exert a great deal of influence.”
Fairfax shares fell 8.5 percent to 59.5 Australian cents in Sydney trading today, more than erasing yesterday’s gain of 7.4 percent. The shares have declined 17 percent this year.
Brad Hatch, a spokesman at Fairfax, declined to comment on the Herald report. Mark Bickerton, a spokesman at Rinehart’s Hancock Prospecting Pty, didn’t respond to an e-mailed request for comment.
Rinehart’s fortune has soared as demand for coal and iron ore drive up the value of the assets she inherited from her father Lang Hancock almost 20 years ago. Rinehart, with an $18.7 billion fortune according to the Bloomberg Billionaires Index, also controls a 10 percent stake in Ten Network Holdings Ltd. (TEN), the nation’s third-ranked commercial broadcaster.
Rinehart has told Fairfax’s board that major shareholders shouldn’t be restricted from involvement in editorial matters, including the hiring and firing of editors, the Herald reported, without saying where it obtained the information. Such demands are in conflict with board protocol that directors not interfere with the editorial direction of the media group and its charter of independence, according to the report.
“What this will do is destroy the credibility of the Fairfax mastheads,” Communications Minister Stephen Conroy told reporters yesterday. “And if you were to start turning it into just a pro-mining industry gazette, well, I don’t think you would say the rest of the shareholders in Fairfax would be too excited.”
Rinehart’s media investments come as Australia considers an easing of ownership laws, including relaxing restrictions on the number of media outlets a company can own.
The recommendations, released in December by the government-appointed Convergence Review, would scrap rules limiting the number of households a broadcaster can reach and may enable companies including News Corp. and Fairfax to expand in broadcast markets.
Rinehart took a public stand against a proposed increase in mining taxes when she climbed on the back of a pickup truck during a June 2010 rally in Perth. The billionaire urged about 2,000 representatives from the resources industry to shout “Ax the tax” until her voice cracked.
Two weeks later, Kevin Rudd was toppled as leader by Julia Gillard amid a slump in opinion polls. The new prime minister identified the mining tax as one of three issues through which the government had “lost its way.”
Instead of the broad-based 40 percent tax on resource profits Rudd proposed, Gillard negotiated with miners for a 30 percent tax on earnings from iron ore and coal that comes into force on July 1.
“We’re not talking about billionaires known for their philanthropy,” said Rowe, who has published essays, commentaries and books about the media. “People are rightly concerned about this.”
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