Gina Rinehart’s children, who sued to remove her as trustee of a $5 billion trust, are on a ‘‘Kamikaze mission’’ that could destroy her iron ore company and endanger a joint venture with Rio Tinto, a lawyer said.
John Hancock and Bianca Rinehart’s attempt to replace their mother as trust manager with a non-family member could jeopardize the agreement with Rio to develop the Hope Downs mine in Western Australia, David Studdy, a lawyer for the billionaire’s Hancock Prospecting, said during a trial in Sydney today.
‘‘The damage would be enormous’’ and ‘‘irreparable,’’ Studdy told New South Wales Supreme Court. Appointing an independent trustee would put almost a quarter of Hancock Prospecting’s shares outside of the family’s direct control, breaching the accord that requires it to wholly own and control the company, he said.
Gina Rinehart inherited the iron ore and coal company from her father Lang Hancock and built into an $18.4 billion fortune, making her the 41st richest person in the world, according to the Bloomberg Billionaires Index. Justice Paul Brereton is overseeing the trial to name a replacement trustee in a two- year-old lawsuit.
Appointing a non-family member may nullify the Rio accord and Hancock Prospecting may then lose access to Rio’s infrastructure including a port and railway, for projects beyond Hope Downs, Studdy said.
The requirement was put in place to prevent Rio’s competitors from gaining access to its infrastructure, Studdy told the court.
John Hancock and Bianca Rinehart don’t wish for Hancock Prospecting to lose its interest in the Hope Downs joint venture, their lawyer Christopher Withers said.
There is no indication Rio would object if the shares are held in trust for the family members and if it did, Hancock Prospecting would have 95 days to fix any problem, Withers said. The issue could be resolved with the appointment of Bianca Rinehart in that time frame, he said.
John Hancock, Bianca Rinehart and Hope Welker Rinehart sued in September 2011 accusing their mother of misconduct when she sought to delay the trust’s vesting date from that month to 2068. Hope Welker Rinehart has withdrawn from the lawsuit.
The case is John Langley Hancock v. Gina Hope Rinehart. 2011/285907, New South Wales Supreme Court.