Rinehart sells part of her Fairfax holding
The battle for the future of Fairfax has taken yet another twist with billionaire Gina Rinehart selling some of her shares just a fortnight after upping her stake.
According to a statement from her company Hancock Prospecting obtained by The Australian, she has sold enough shares to take her down from her previous stake of 18.67% to just below 15%.
When she increased her stake last month it triggered speculation that she was seeking to take control of Fairfax.
But in the statement, Hancock said: “We also deny unsubstantiated rumours spread by others, that we are about to “make an offer” for the Company, when we have previously stated we are not seeking control of Fairfax, just the appointment of 2 directors plus an independent out of up to 12 directors on the board.”
Er sorry am i blonde… can someone explain this sentence to me??
One reason for taking the holding below 15% is to address an issue relating to shareholders with larger holdings than that having to indemnify other board members against legal action.
Hi Mich,
Badly expressed by me.
My understanding in a nutshell: the directors of Fairfax get corporate insurance against being sued over the actions they carry out as the board. But there’s usually a provision that the insurance does not cover being sued by a major shareholder (ie someone with more than 15%). So a person with that holding would have to be asked to promise not to take such an action or not get onto the board. But I’d be delighted if somebody can explain that better than me…
Cheers,
Tim – Mumbrella
This is getting to be some sort of porn. The slightly whacky, bitter rich woman has taken to baiting, kicking, badgering and flogging a bunch of fairly limited intellects who thought they had bagged board seats in a nice old fashioned mahogany row.
Maybe she’s going to film it all for a channel 10 sitcom? Roger Corbett and his partner Greg Hywood with Gina Rinehart as the cooky neighbour – in a modern version of The Honeymooners?
The only motivation behind Rinehart’s actions – media control and manipulation. Certainly not the rebuilding of our media industry.
This is someone who despite enormous wealth from our own resources, has no philanthropic ambition or commitment?
Australia should hope that she doesn’t succeed.
Well said Richard
SO circulation is down 19% YOY for the Sun Herald and 10% on SMH – Mon-Fri. Surely this mean the editorial team isn’t providing the right content? It would have been easier to keep Gina out of Fairfax if the circulation wasn’t declinging so fast
Thanks Tim. Got it. I think…er…
Tim. It means she can sue directors without an indemnity. So it’s not a logical concessions but instead a threat.
What has Mrs Rinehart done to Improve the Ten Network since she became a board member ? I don’t know.
What will she do to improve Fairfax if she becomes a board member ? I don’t know.
I could be wrong, but I think the 15 percent limit applies to the director who might be sued. Hence Rinehart would not have been covered, and the board was using this as a handy reason against giving her a seat.
Rinehart responded by reducing her holding, thus becoming eligible for the insurance cover and removing this as a reason for refusing her a seat on the board.
The situation is that Fairfax’s insurance policy indemnifies directors and the company in case they are sued by another board member. But they are only indemnified if the board memeber that’s suing owns less than 15%. If the suing board memebr owns more than 15% than the other directors are not indemnified against legal action taken by that director. The policy contains a clause requiring directors that hold more than 15% of the company to agree not to sue other Fairfax directors or the policy becomes void.
As I understand, Mrs Rinehart refused to give up her right to sue the directors. Now as you can imagine Mrs Rinehart doesn’t mind a fight in the courts. She can afford a long costly legal battle.
From speaking with many media folk i am not alone thinking that it is not a good thing for our media, nor society for Reinhart to rein supreme at Fairfax. Imagine that; our biggest online and printed news resources owned by Murdoch and Reinhart!
Can we set up a campaign to lobby Bill Gates to save Fairfax for the sake of Australian media? Could he save it and use it as a ‘do good’ media service and also to counter balance the shite that splurges out of News Ltd…?
Idea’s man, at first it sound like maybe a good idea, but I doubt that Bill Gates would want to pick a fight with Mrs Rinehart. He does a lot of very good things around the world and perhaps he is too busy to be distracted by this.
If we really want to save Fairfax from Mrs Rinehart than we need to do it ourselves. I propose that if we really care about Fairfax that we then invest some money buying shares in this great Australian company. There are 2,351,955,725 Fairfax shares on issue. The shares are currently trading at historical lows of about 58c so maybe they’re even a great investment. I certainly believe they are and I do have a very substantial part of my share portfolio invested in Fairfax.
If we can get 50,000 people to invest about $10,000 each then we can collectively own about $500,000,000 of the company’s shares or about 34%. But of course if everyone begins buying then the share price will go up so it isn’t quite that simple.
At the end of the day if we really believe in Fairfax then let’s stick our money where our mouths are. I note that the current board of directors own very few shares in the company so I suppose that maybe they don’t have a lot of belief in their own ability to turn the company’s financial fortunes around. Perhaps the board needs a few believers who can see a brighter future for the company. But are there enough believers out there to put there money where their mouths , eyes and ears are ?