Private Rinehart emails revealed
Adele Ferguson gives a preview of her weekend story about the Rinehart family feud, which will include private emails between John Hancock, his mother and the CFO of Hancock Prospecting.PT2M2S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2u3xk 620 349 September 20, 2013
One of Gina Rinehart's closest lieutenants in the Hancock Prospecting empire warned her son he would be hunted down like Christopher Skase unless he ceded control of the family's multibillion-dollar trust to his mother.
Hancock Prospecting chief financial officer Jay Newby sent a series of explosive emails to John Hancock a day after the mining magnate warned her four children they would be bankrupted if the trust was allowed to vest.
In one email, Mr Newby wrote: ''Remember what happened to Skase when he tried to escape being brought back to Australia when bankrupt. The government simply doesn't let people off for not paying due taxation.''
A hard man to track down: Christopher Skase fled to Majorca after his business empire crashed. Photo: Supplied
Christopher Skase became a fugitive when he fled Australia for Spain in 1991 after his business empire collapsed.
In the same email Mr Newby says: ''Please don't think for one second this means you can enjoy your Thai palace should a court-appointed designate be appointed for your bankruptcy.''
Mr Hancock later received a private binding ruling from the Australian Tax Office that said no capital gains tax was payable by the beneficiaries on vesting of the trust.
Hancock Prospecting CFO Jay Newby. Photo: Sasha Woolley
Mr Hancock had been living with his family in Thailand in a house he helped build using a loan from Hancock Prospecting Pty Ltd (HPPL), which is partly owned by the family trust. HPPL holds the title deed.
In a bitter court dispute, Mr Hancock and one of his three sisters, Bianca Rinehart, are applying to remove their mother as trustee of the Hope Margaret Hancock Trust, alleging she has acted ''deceitfully'' and with ''gross dishonesty''.
A trial is set for October 8, unless they reach a settlement beforehand.
The trust was set up in 1988 by Gina Rinehart's father, Lang Hancock, with her children as beneficiaries.
It was due to vest on September 6, 2011, when the youngest child turned 25, giving them financial independence.
Three days before, Mrs Rinehart wrote a letter to each of her children warning them they would face a capital gains tax bill that would bankrupt them if the trust was allowed to vest.
Mr Hancock questioned whether the beneficiaries would face a tax bill. He wrote to Mr Newby: ''Nothing I've heard makes me believe the CGT fabrication.''
Mr Newby said: ''We don't take any chances with tax - the stakes are simply too high. You cannot take positions in tax based on incomplete information - the advice considers all relevant matters … The tax position presented in the trustee's letter is absolutely correct, and is not a basis for negotiation.''
In court this week it emerged that Mr Newby told PwC to prepare two versions of its advice. In one version he requested they remove any reference to the possibility that shares in the family company, which were to be distributed to the children, could be pre-capital gains tax.
In an email sent on September 2, 2011, Mr Newby told PwC: ''I would like the 'sanitised' version signed and sent please.'' According to an internal email from PwC, this version was ''for provision to the children''.
Mrs Rinehart failed in a last-ditch attempt to stop the trial and send the matter to private arbitration. The attempt to derail the trial came days after Mr Hancock was given access to hundreds of pages of documents between Mr Newby and PwC.