Rinehart v Rinehart is more than a family affair. It is also a matter with potentially profound implications for WA because it is effectively a legal dispute inside the state’s fourth biggest business, which also ranks as Australia’s 20th biggest company.
The sheer size of the fortune already amassed by the Rinehart family’s current head, Gina, means that if she was listed on the stock exchange she would rank alongside Brambles, and be bigger than Macquarie Bank.
In WA terms her estimated net worth of $10 billion ranks her only behind Wesfarmers, Woodside and Fortescue Metals.
Put another way, Rinehart’s estimated net worth means she already has a higher value than Qantas ($3.4 billion), Harvey Norman ($2.2 billion), Fairfax Media ($1.8 billion), and Seven West Media ($1.7 billion) – combined.
In time, and assuming the resources boom continues, the Rinehart family fortune could make them more valuable than Telstra, Rio Tinto, or Commonwealth Bank.
It is the wealth being spun out of iron ore production and a residual iron ore royalty left by Gina’s father, the late Lang Hancock, which is making the Rinehart family super-wealthy, and extremely important to the future of Australia, especially WA.
Decisions made on how the Rinehart wealth is invested are starting to affect thousands of workers in WA because the days of simply banking a royalty cheque paid by Rio Tinto are over.
Today, the Rinehart family has a half-share in one valuable iron ore mine at Hope Downs, is busy building another at Roy Hill, and has a pipeline of future iron ore mines in the Pilbara, plus coal mines in Queensland.
The family fortune has also started to spill over into investments in the media, and other businesses with the most recently rumoured being the purchase of a tree plantation in South Australia as part of a carbon emissions offset policy.
If all this activity was happening inside a stock exchange listed company each event would be widely covered, and the public would get regular reports on progress, as would government.
It’s not, obviously, as Justice Paul Brereton, found in the NSW Supreme Court yesterday when imposing a ban on media coverage of a dispute between Gina and three of her four children.
The judge cited the family’s immense wealth and past high profile legal dispute between Gina and other members of her family for preventing prying eyes from seeing what’s causing the friction.
However, enough information was contained in the judge’s public comments to make it clear that this is a matter which lies at the very heart of the Rinehart fortune.
Justice Brereton was reported in The Australian newspaper this morning as saying: “Following previous disharmony between the parties, they entered into confidential arrangements, culminating in a deed made in April, 2007, which imposed on any of them who had a dispute under the deed with another party an obligation to notify the other or others and to attempt to resolve their differences by confidential mediation”.
The fact that the case launched by three of Gina’s children even reached the NSW Supreme Court is a clue that something has happened to trigger a move which is clearly outside the terms of the original deed designed to maintain harmony.
Pointless as it is to speculate on what caused this outbreak of disharmony there is a hint of how central the matter is to the family in the name of the company mentioned in court: 150 Investments Pty Ltd.
Few people outside the Rinehart family have ever heard of 150 Investments before, but it could be significant that the Hancock/Rinehart family home is at 150 Victoria Avenue, Dalkeith – which could mean that 150 Investments is the ultimate inner sanctum of the family firm.
Commonsense will prevail over the next few weeks and the dispute smoothed away. It would be foolish to continue arguing in court even with a media ban. Far better to use a private arbitration process.
But, whatever happens there will be questions left hanging, such as:
- What is the pecking order of succession in the family after 57 year-old Gina releases her grip on the reins.
- Whether her children want to continue building a vast empire of mines and media.
- Whether a private family can behave like a large stock-exchange listed company with all the attention that brings.
- Whether future Australian Governments will tolerate so much wealth accumulating in one family without applying punitive taxes.
Whatever the outcome, Rinehart watching has just been elevated to a new height or, if you’re in Gina’s shoes, it has sunk to a new low.
