Bianca Rinehart’s Husband Rejected to Manage Family TrustJoe Schneider
An Australian judge rejected the nomination of Bianca Rinehart’s husband, whom she married unbeknown to her mother or youngest sister according to a lawyer, to manage a $4 billion family trust.
Sasha Serebryakov, until now known as Bianca’s partner with whom she has a 3-year-old son, was proposed as an alternative trustee by Bianca and her brother John Hancock to manage the fund after they succeeded in forcing their mother to surrender control of the holdings in a two-year-old lawsuit.
“I can’t conceive of any circumstance in which the court would decline to appoint Bianca as trustee but would be prepared to appoint her husband,” New South Wales Supreme Court Justice Paul Brereton said at a hearing in Sydney today.
John Hancock and Bianca seek to find a replacement trustee for their mother Gina, Australia’s richest person, according to the Bloomberg Billionaires Index. Gina Rinehart agreed on Oct. 2 to step aside from managing the fund which holds almost a quarter of the shares of closely held Hancock Prospecting Pty, in a bid to halt a lawsuit to remove her. Ginia, the sister of John and Bianca, has sided with her mother in the litigation.
Richard McHugh, Ginia’s lawyer, objected to Serebryakov’s nomination saying: “This secret marriage that took place was a pretty good reason for objecting.”
Brereton had ruled on Oct. 14 that it would be too risky to name an independent trustee as John and Bianca had proposed. Replacing their mother with a non-family member might jeopardize an agreement with Rio Tinto Group on operations of the Hope Downs mine in Western Australia, David Studdy, a lawyer for the billionaire’s Hancock Prospecting, had said.
Brereton said he was left with two options, naming Bianca Rinehart as trustee or choosing a corporate structure recommended by Ginia.
Lawyers are scheduled to argue the merits of the opposing propositions at a hearing in Sydney on Dec. 3.
Brereton also today rejected a Nov. 22 application from the Australian Taxation Office for access to filings and transcripts in the dispute, ruling the request was too broad. He said the tax office could seek access to the documents in open court at the Dec. 3 hearing.
A tax office spokeswoman, who asked not to be named per department policy, said the tax office doesn’t comment on investigations.
The tax office had advised John Hancock that the children wouldn’t be liable for capital gains taxes if the trust vested, contrary to Gina Rinehart’s claim that they would be forced into bankruptcy by those taxes.
Court documents also showed Hancock Prospecting Chief Financial Officer Jay Newby obtained a “sanitized” report from PriceWaterhouseCoopers LLP in which any references to any possibility that the children wouldn’t be liable for the taxes were removed.
Gina Rinehart inherited iron ore and coal assets from her father Lang Hancock and built them into a fortune worth $18 billion today.
Ginia Rinehart has created JBHG Pty, which would be co-owned by Gina Rinehart’s four children, with the trust assets in the company’s name. She proposed hiring an independent trustee company that would name a sole director for JBHG who would manage the trust.
Such a structure would comply with an agreement between Hancock Prospecting and Rio that all Hancock Prospecting shares are owned by Gina Rinehart or her direct descendents, McHugh said.
The requirement was put in place to prevent Rio’s competitors from gaining access to its infrastructure, including a port and railway, Studdy told the court during a trial in Sydney last month. A breach in the deal could also mean Hancock Prospecting loses access to the infrastructure for projects beyond Hope Downs, he said.
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. Hope Welker Rinehart has withdrawn from the lawsuit.
The case is John Langley Hancock v. Gina Hope Rinehart. 2011/285907, New South Wales Supreme Court (Sydney).