With a net worth of $10.9 billion, Gina Rinehart is no slouch in the wealth department. That's enough to make her the richest person in Australia. That might sound pretty good to you or me, but for Mrs. Rinehart, it actually represents a pretty steep markdown. Earlier this week, an Australian court absolutely dropped the hammer on Gina in an ongoing battle over her family fortune. The court ruling could cost her $3 billion, representing a 24.3% stake in the family business, Hancock Prospecting.
The case lost by Rinehart is a complex one. It began three and a half years ago, when her daughter, Hope Welker, sued over Gina's decision to extend her ownership of the trust to the year 2068. That's a 57-year extension. The Hope Margaret Hancock Trust was set up by company founder, Lang Hancock (Gina's father), to revert to his grandchildren – John, Bianca, Ginia and Hope. Ginia sided with her mother, while the other three sued for what they believed was rightfully theirs (and now the courts agree with them, at least in part).
Matt King/Getty Images
Hope Welker settled in 2013 for $45 million, but Rinehart's two oldest children, John and Bianca, kept on with the fight and they've finally been rewarded with control over the $3 billion trust. And it didn't come easily – NSW Supreme Court Justice Paul Brereton, who presided over the case and made the final decision, said that "Mrs. Rinehart has demonstrated that she is prepared to go to extraordinary lengths to retain control, directly or indirectly, of the Trust, and that she is capable of exerting enormous pressure and great influence to do so."
That reportedly included an elaborate ruse perpetrated by Gina Rinehart that involved manipulating financial services firm PricewaterhouseCoopers into giving her children false advice regarding a hefty capital gains tax that they would not actually have to pay if the trust fell under their control. The "advice" said that Bianca would be forced to cough up $142 million in an attempt to discourage her from participating further in this legal battle. Money they did not have. It obviously didn't work, though, and the attempt by Rinehart may have further negative implications for her down the road.
The news comes at a bad time for Gina Rinehart, as the iron ore magnate is currently starting production at a brand new iron ore mine in the western part of Australia, and which represents an estimated $10 billion investment for her company.
Before you start shedding tears for Gina Rinehart, though, you should know that the biggest part of her $10.9 billion net worth comes from an "evergreen royalty" paid out from another mining company, Rio Tinto, as well as a half-share in one of that same company's mines. As for Bianca Rinehart, she was awarded control of the trust on a probationary basis, and is required by law to consult with other shareholders and the court before making any decisions about how it's used. In any case, the future for the mining company owned by the Rinehart family would appear to be a rocky one, even if a conclusive legal decision over the Hope Margaret Hancock Trust.
