Independent trustee ruled out in Rinehart mining family dispute
US$4 billion at stake as heiress Gina Rinehart's children tried to replace her as fund manager
An Australian judge has ruled against naming an independent trustee to a US$4 billion fund that is at the centre of a bitter family feud between mining billionaire Gina Rinehart and her children.
The decision came after a lawyer for Rinehart's firm said the children, who proposed the idea, were on a "kamikaze mission" that could destroy her iron ore company.
John Hancock and Bianca Rinehart's attempt to replace their mother as trust manager with a non-family member could jeopardise an agreement with Rio Tinto Group on operations of the Hope Downs mine in Western Australia, said David Studdy, a lawyer for the billionaire's Hancock Prospecting.
"It would be imprudent to appoint a non-lineal trustee," Justice Paul Brereton said at the conclusion of a four-day trial in Sydney to determine the replacement for Gina Rinehart in a two-year-old lawsuit.
Gina Rinehart inherited iron ore and coal assets from her father Lang Hancock and built them into a US$18.4 billion fortune, making her the 41st richest person in the world, according to the Bloomberg Billionaires Index.
Lang Hancock set up the trust to benefit his grandchildren, with their mother as trustee.
That trust holds about 24 per cent of the shares in Hancock Prospecting. But in September 2011, Gina Rinehart tried to delay the multi-billion-dollar trust's vesting date from that month to 2068.
John and Bianca Rinehart and their sister, Hope Welker Rinehart, immediately sued, accusing their mother of misconduct. Hope Welker Rinehart has withdrawn from the lawsuit, amid financial pressure and the collapse of her marriage.
Brereton said he was left with two options, naming Bianca Rinehart as trustee or choosing a corporate structure recommended by Gina Rinehart's youngest daughter, Ginia, who has sided with her mother through the two years of litigation over the trust.
Naming Bianca Rinehart and Hope Welker Rinehart as co-trustees had "some potential", but Hope Welker Rinehart indicated she did not want the job, Brereton said.
"It would be fraught with further difficulty to appoint either John or Ginia, or them jointly," Brereton said. He gave lawyers until Friday to submit their suggestions on replacements.