"There's one really good reason she should be invited in: she couldn't do any worse. Rinehart -- who Fairfax journalists declare is the world's richest women -- is pretty canny at making a buck. She's made the single largest investment in a media company from outside the sphere we've seen in this country in some time. She owns about 15% of a company worth next to nothing on the stock market. Is there any legitimate justification for denying her a vote?"There is a truckload of justification in denying Rinehart and Beecher’s personal dealings with Corbett -- along with any commercial negotiations down the years -- should not distract from what should be a debate about the broader public interest. Rinehart is Rinehart -- an extreme one-woman fighting machine. But Fairfax is so much more than Roger Corbett. If Rinehart wants to meddle with editorial, she’s only reconfirming her unsuitability, which was already pretty obvious with that litigation against Seven West Media attempting to have journalist Steve Pennells reveal his sources. Then you have her demonstrable failure to support the concept of free and open courts with all those endless attempts to suppress the brazen oppression of her own children. Maybe Corbett should offer a board seat to eldest son John Hancock, as he’s a shareholder too in the companies that are stalking Fairfax. Given that Hancock Prospecting is already carrying some debt and is about to embark on a multibillion dollar coal and iron ore investment program, it really is quite reckless of Gina to spray almost $500 million on two debt-laden media companies. She hasn’t consulted with three of her adult children, the oppressed Hancock Prospecting minority shareholders, about this disastrous diminution of their respective entitlements. Similarly, if granted control of Fairfax, Gina probably wouldn’t consult with Fairfax minority shareholders, existing directors, editors or anyone else about her calamitous plans to shift the company’s traditional progressive voice to the political Right. Such a move would probably send Fairfax to the wall. For all of these reasons, if the mining heiress isn’t prepared to make a full bid to all Fairfax shareholders, there is no way the board should invite her inside the tent. After all, as a director of Ten Network Holdings she actively competes with Fairfax for scarce advertising dollars. Institutional investors as a whole never fail to disappoint when it comes to sitting on the fence. With the noble exception of Perpetual’s Matt Williams, they have been largely silent about James Packer’s outrageous attempts to seize control of Echo Entertainment Group without making a full bid. Similarly, it has only been fund manager Simon Marais from Allan Gray speaking out about Gina and the giant South African is playing a dangerous game. If Rinehart did indeed call an EGM to spill the Fairfax board, Marais would not have his claimed 8% stake to vote in full, as many of Allan Gray’s super funds clients retain voting rights. Marais was right to play footsies with Rinehart in an attempt to prod a complacent board into belated action. It worked with Monday’s extraordinary plan. However, the stock tanked again yesterday as investors contemplated the fact that Rinehart’s irrational politically motivated buying is about to expire when she hits the 20% takeover threshold. Rinehart was once very close to Kerry Stokes and now seems tight with fellow Ten investor James Packer. The three billionaires buddies all appear to be fans of creepy backdoor tactics that deny all shareholders a premium for control. That might be OK at Echo, because Packer does run a good high-roller casino business. But the same can’t be said for Rinehart, who would inevitably end up destroying value at Fairfax. If the $29 billion woman isn’t even capable of standing up in front of a few journalists and answering questions, she certainly shouldn’t be given control of Australia’s most respected independent media house. Roger Corbett should try to salvage something from his disastrous stint on the Fairfax board by staring down Rinehart, especially if she won’t sign the board protocol around editorial independence. As chairman of mass media company, he should also try his hand at speaking publicly about these issues, rather than outsourcing the job to people such as David Marr. After that, he would be well advised to resign and hand over to someone with the time and media experience to lead Fairfax through the challenges ahead.
Mayne: would Gina oppress minority Fairfax shareholders?
Having seen how Gina Rinehart treats her kids, does any self-interested Fairfax Media investor seriously fancy being a minority shareholder in a complex beast controlled by Australia’s most litigious Rich Lister.