Gina Rinehart, the Australian iron ore billionaire and reputedly the world’s richest woman, has threatened to dispose of her strategic stake in Fairfax Media, publisher of the Sydney Morning Herald, unless she is given board seats “without unsuitable conditions”.
Ms. Rinehart’s company Hancock Prospecting told the Australian Broadcasting Corporation’s Four Corners programme that it had hoped the board would view the mining magnate as a “white knight” and potential saviour of the ailing media company, which has experienced a sharp decline in circulation and print revenues.
“Unless director positions are offered without unsuitable conditions, Ms. Rinehart is unable to assist Fairfax at this time,” read an emailed statement published on the ABC’s website against the wishes of the company. “Hancock may hence sell its interest, and may consider repurchasing at some other time.”
Ms. Rinehart, estimated to be worth $29-billion Australian ($29.1-billion U.S.), owns nearly 19 per cent of Fairfax and has demanded three seats on the company’s board as well as concessions on editorial independence, according to local media reports. These include the right to hire and fire editors of Fairfax publications.
Peter Cox, a media consultant at Cox Media, said Ms Rinehart would find it difficult to sell her $230-million (Australian) stake in the market and ultimately the only way of bending Fairfax to her will would be to make an offer for the company.
“If she does decide to sell . . . who is going to buy the shares?” said Mr Cox. Fairfax stock fell 3.5 per cent to a record low of $0.55 on Tuesday.
The push by Ms. Rinehart, who also owns 10 per cent of Australian broadcaster Ten Network, where she has a seat on the board, comes amid a broader shake-up in the Australian media industry.
Last week Fairfax, Australia’s second-biggest publisher by newspapers sold, unveiled a significant restructuring of its business including axing a fifth of its staff, closing two printing presses and switching the Sydney Morning Herald and The Age to tabloid format. On Monday, the editors of the Sydney Morning Herald and The Age, the country’s two oldest broadsheets, resigned.
News Corp. has also announced an overhaul of its Australian print operations and the proposed acquisition of James Packer’s Consolidated Media Holdings , a deal that would double its holding in Foxtel, Australia’s leading pay-television company.
Ms. Rinehart’s stakebuilding has caused alarm in Canberra, particularly among the ruling Labor party, which is considering the findings of two reviews of the media industry.
Wayne Swan, treasurer, has said the billionaire’s move could have implications for democracy while Stephen Conroy, communications minister, has warned Ms. Rinehart not to breach Fairfax’s charter of editorial independence.
The Australian Greens, meanwhile, are set to put a bill before parliament that would effectively force wealthy individuals to pass a public interest test before they could buy a large media company. Mr Conroy is reported to be in favour of such a move.
Ms. Rinehart’s Hancock Prospecting also said the mining mogul – who has been critical of the government’s controversial mining and carbon taxes – was concerned by the media’s “lack of understanding” on the issue of climate change.
“To lessen the fear the media have caused over these issues, Ms Rinehart suggests that the media should also permit to be published that climate change has been occurring naturally since the Earth began, not just the view of the climate extremists,” it said.