Gina Rinehart: Trust Fund Family Feud
The acrimonious family feud between Australia’s richest person Gina Rinehart and her children has been making headlines for almost four years.
Gina Rinehart’s father Langley George Hancock established the Hope Margaret Hancock Trust in 1988. The trust bears the name of Gina’s mother who passed away from cancer.
Gina was nominated as the sole trustee of the trust and pursuant to the terms of the trust is required to use the trust’s assets to provide for the “education, advancement and benefit” of Langley’s grandchildren being Gina’s children.
The main asset of the trust is a 24% stake in Hancock Prospecting a mining company founded by Langley. The trust has an approximate reported value of $5 billion (yes that right, billion!).
In accepting their appointment, a trustee makes a solemn commitment to protect the assets of the trust and act always in best interests of the beneficiaries.
There are a number of allegations brought against Gina by her children that she has breached this commitment namely:
- Gina changed the vesting date in the trust without her children’s knowledge or consent, effectively pushing back the date her children are entitled to the assets under the trust.
- Gina transferred assets from the trust to her personal name to increase her holdings in Hancock Prospecting from 51% to 76%. If this allegation is true, the trust’s interest in Hancock Prospecting will increase from 24% to 49%.
- Gina has orchestrated a mountain of legal documents in an attempt to hide the transfer of assets out of the trust and has falsified company board minutes.
- Gina allegedly compelled her children when young to sign five trust deeds purporting to prevent her children from raising any legal challenges against her due to her flagrant breaches of her obligations as trustee.
Gina has attempted to have the matter heard behind closed doors such as in arbitration, which is not surprising given the way the issue highlights Gina as a deceitful and greedy parent as well as a spiteful daughter, given her father’s intention in establishing the trust to benefit his grandchildren.
Moral obloquy aside if the allegations are true, Gina’s action fly in the face of her promise made in accepting the appointment as trustee. Gina will have committed breaches of her fiduciary obligations as trustee as well as other possible violations such as fraud.
Gina’s youngest child Hope, withdrew from involvement in the proceedings in 2013 after reportedly receiving $25 million in a settlement.
The Supreme Court has recently granted Gina’s oldest daughter Bianca control of the trust however, it waits to be seen whether Gina will appeal this decision.
If you have any questions in relation to your rights, duties and responsibilities as either a trustee or beneficiary or are seeking to vary the terms of a trust deed, please contact the commercial team at McLaughlins, your Gold Coast Law Firm.
Author: Amy Douglas
Partner: Ian Kennedy