Billionaire Rinehart’s Hancock Profit Surged 74% in 2011
Billionaire Gina Rinehart’s closely held Hancock Prospecting Pty posted a 74 percent jump in profit in 2011 as iron ore sales and royalties surged, according to financial statements filed with Australian regulators.
Profit in the 12 months ended June 2011 rose to A$1.2 billion ($1.25 billion) from A$688 million a year earlier, as revenue climbed 68 percent to A$2.37 billion, Hancock said in financial statements filed with the Australian Securities & Investments Commission on Dec. 24.
The mining company, based in Perth, had resisted ASIC’s demands to file the financial records, saying it was an “unreasonable burden” that would put it at a competitive disadvantage. Hancock was scheduled to appeal the ASIC order at a hearing before the Administrative Appeals Tribunal in Perth beginning Feb. 5. The ASIC filing was made with no notice except a posting on the regulator’s website.
Rinehart’s company, founded by Gina’s late father, Lang Hancock, said in an exchange of letters with ASIC that a section of the Act provided for a “grandfathering,” which exempted private companies from filing the statements.
“HPPL has always been 100 percent owned by private entities controlled directly by Mr. Hancock and Mrs. Rinehart,” Tadeusz Watroba, a Hancock director, wrote to the regulator in October 2011. “In much the same way as other private family groups in Australia who do not lodge their financial statements with ASIC due to the grandfathering provisions.”
Hancock paid A$12.5 million of dividends in the fiscal year ended June 2011, more than double the A$6.17 million paid out 12 months earlier, according to the financial statements.
Hancock had promised to pay a minimum of 25 percent of the cash flow after tax and interest from its Hope Downs mine to the Hope Margaret Hancock Trust, according to documents filed in a lawsuit by three of Rinehart’s children, who are seeking to have her removed as trustee. The first distribution was to have taken place last January, according to the documents.
“Certain companies within the group are parties to a claim in respect of royalties from the Hope Downs mine,” Hancock said in the only reference to its legal disputes in the filing. “It is not possible to reliably quantify what, if any, damages could be awarded if the claim were to be successful.”
Wright Prospecting Pty, founded by Hancock’s former partner Peter Wright, sued in September seeking 50 percent of Hancock’s stake in three tenements known as Hope Downs 4, 5 and 6.
Hancock said there are other legal disputes and claims and it’s the opinion of directors that “no significant liabilities” arise from those claims.
The Wright lawsuit is between Wright Prospecting Pty and Hancock Prospecting Pty. Civ2617/2012. Supreme Court of Western Australia (Perth). The children’s lawsuit is Hope Rinehart Welker v Gina Rinehart. 2011/285907. New South Wales Supreme Court (Sydney).
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