Gina Rinehart instigated a “special project” to increase her own shareholding in Hancock family assets to the detriment of her children, the WA Supreme Court heard.
The tangled web of the Hancock family dynasty continues to unravel itself in court this week, as lawyers for Mrs Rinehart’s eldest children unpack moves they say increased her share in family assets from 51 per cent to 76 per cent.
That increase was against Lang Hancock’s wishes, who left Mrs Rinehart’s four children more than $61 million in mining assets, including Hope Downs, when he died, the court heard.
At the centre of the claims delivered by Christopher Whithers SC, lawyer for John Hancock and Bianca Rinehart, was a confidential 1994 memo which shows Mrs Rinehart discussing deliberately deflating the value of Hancock Prospecting shares held in the Hancock Family Memorial Fund (HFMF).
It was one step in a series of moves Mr Whithers said Mrs Rinehart “manufactured”, that eventually led the trust Mr Hancock had established to become a shell of itself.
While Mrs Rinehart’s lawyers claimed last week she moved the assets to save Hancock Prospecting by undoing “errors” Lang Hancock had made before his death, Mr Whithers claimed the moves enriched Mrs Hancock’s firms instead.
The court was told Mrs Rinehart made a series of transactions that included entering deeds that saw the trust take on the debts Hancock Resources owed to Hancock Prospecting (HPPL), and transferring the trust’s mining tenements to HPPL.
Mr Whithers told the court this was effectively “a death warrant” for Hancock Resources.
“Hancock Resources (Limited) was a company that was in full-blown development, but in 1992 it became a company effectively frozen in time with no mining assets, no money for exploration and no prospects,” Mr Whithers said.
While last week Mrs Rinehart’s lawyers argued her father breached his fiduciary duties to the family businesses, the court heard Mrs Rinehart’s actions showed she had also breached her own.
“It’s hard to imagine a more egregious breach of duties,” Mr Whithers said of the memo which he added Mrs Rinehart did not wish to see the light of day.
“Gina is embarking upon this special project despite her fiduciary duties to her children to preserve the assets of (the trust).”
The Hancock family dramas have dominated the headlines, but the case has actually been brought by Wright Prospecting – the company founded by Mr Hancock’s former partner Peter Wright – who are claiming massive rights to royalties for parts of the Hope Downs mines and ownership of other parts.
The case continues.