The mother of all feuds’I’m doing it for Lang’: John Hancock
At 10am on Tuesday the NSW Supreme Court promises to be packed to the rafters as lawyers, media and the public jostle for a seat at the trial of the year: the country’s richest person, Gina Rinehart, versus two of her four children.
But before the trial begins talk is turning to the thorny issue of who will run the multibillion-dollar family trust. Rinehart favours a lineal descendant but at the end of the day if even one of the four beneficiary’s objects to another, the court will have an independent trustee appointed.
Rinehart’s estranged son John Hancock has thrown his hat in the ring, but Rinehart’s daughter Ginia, who is seen by Rinehart as the ”one”, is yet to nominate. Speculation was rife on the eve of the trial that Ginia would have to nominate by the start of the trial. If she doesn’t it will raise questions about whether she wanted any of this, or whether she has been made a pawn in the battle to control the family and the keys to the Hancock/Rinehart kingdom.
Whatever the case, if this isn’t settled by the family, an independent trustee will put the blowtorch on the running of the trust since the baton was handed to Rinehart after her father Lang Hancock died in 1992.
A statement Ginia issued to the media minutes after a suppression order was lifted left nobody in any doubt how she felt about her siblings and her mother. ”This case is motivated entirely by greed and I have no doubt that one day soon my brother and sisters will regret putting money before family,” she said in a press release. ”My loving and hard-working mother only ever wanted the best for her children.”
Interestingly, materials attached to an affidavit filed by John and Bianca’s lawyer last week include payments made from the family trust accounts, which show no income was distributed to John, Bianca and Hope received a small amount and Ginia $820,000.
It is a high-stakes game. The family trust is worth at least $5 billion. Until now the four children have had little say in their inheritance as their mother has ruled the family trust with an iron fist, requesting they sign various deeds over the years that effectively gagged them from talking to the media or saying anything that would embarrass her or challenge her authority as head of the trust.
But in September 2011, when the trust was due to vest, three of the four children decided to fight back with Rinehart’s weapon of choice: litigation. (One of the three, Hope, withdrew from the action earlier this year due to financial stress.) At the heart of their claim is the allegation that Rinehart ”engaged in a strategy to mislead” them about vesting the family trust, which was due to vest September 6, 2011, when the youngest child Ginia turned 25.
Their key claim revolves around Rinehart’s decision as trustee to demand the voting rights to the children’s shares in return for extending the vesting date of the trust from September 6, 2011, to 2068 – when they would be in their 80s and 90s – otherwise they’d be bankrupted by a massive capital gains tax bill. Rinehart informed her children in a letter that they had three days to agree to this plan.
It later became public that Hancock obtained a ruling from the Australian Tax Office that said there would be no capital gains tax on the trust vesting. This means no bankruptcy threat.
The action against her kids has been the talk of the town for two years and she has desperately tried to keep it out of the public domain. At various times she has tried to suppress it, have it dropped, push it into private arbitration, make settlement offers to the various children, and last week she offered to stand down as trustee in the hope ”this litigation is essentially over”.
None of her tactics seem to have worked. With the trial set to begin, it looks like the public will finally get to hear her children’s allegations of gross misconduct in her role as trustee of the Hope Margaret Hancock Trust. At all times Rinehart has defended her actions as in her family’s best interests.
During discovery they have been granted access to numerous documents, some of which will be aired in court, including the advice that was used to try to influence the children to extend the trust. The documents have been released in dribs and drabs but they show two versions of tax advice were requested on the trust vesting, with the so-called ”sanitised” version, sent to the children.
In an interview with the Age Good Weekend last month Hancock said his motivation for fighting the case was to fulfil his grandfather Lang Hancock’s wishes that one day he would ”run everything one day”.
More significantly still, it was also Lang’s intention, stated just before he died, that John and Bianca control the Hope Downs tenements, which currently generate more than $1 billion a year, through the family trust. After his death, these tenements were transferred to Hancock Prospecting, which is majority owned by Rinehart. This will no doubt be looked into.
Barring an eleventh-hour settlement, the trial promises to be full of twists and turns, allegations and counter-claims, including the release of a number of private emails, all designed to sway opinion.
The original release of this article first appeared on the website of Hangzhou Night Net.