Family feud: The much anticipated court hearing between mining magnate Gina Rinehart and her children began on Wednesday. Photo: AFR
Australia's richest person, Gina Rinehart, has been accused of committing "fraud on power" as the much-anticipated court hearing examining the feud between Mrs Rinehart and her two eldest children finally began on Wednesday.
Ms Rinehart is fighting claims by her children John Hancock and Bianca Rinehart that she mismanaged a $5 billion family trust set up by their late grandfather, Lang Hancock. The children argue their mother had not acted in the best interests of the beneficiaries and deliberately deceived them.
The dispute erupted two years ago, days before youngest daughter Ginia was to turn 25 and the trust was due to vest.
Ahead of the trial's beginning, Bianca Rinehart was nominated as replacement trustee by John Hancock in the interests of family harmony - but that was not supported by Ginia, who has sided with her mother. But the move paved the way for the commencement of the civil trial in which Mrs Rinehart is accused of ''fundamentally'' breaching her duty as trustee when she altered the company's constitution during a multibillion-dollar joint venture with Rio Tinto.
The result of the changes was to cement Mrs Rinehart's control over the trust and were not justified by the Rio joint venture, the NSW Supreme Court heard. In substance, the amendments prohibited any shareholder in Hancock Prospecting from transferring shares in the company to anyone other than a non-lineal descendent.
In addition, if a decision was made by any shareholder to dispose of their shares, the company had a right to buy them, which would leave Mrs Rinehart with control, as she owns 76.6 per cent of the company. The family trust owns the rest. The case continues.