By Ross Kelly
SYDNEY--Australian mining tycoon Andrew Forrest has weighed into a bitter legal dispute between Gina Rinehart, Australia's richest person, and two of her children over control of a multibillion dollar family trust.
The founder and chairman of iron ore miner Fortescue Metals Group Ltd. (FMG.AU) has sworn an affidavit supporting one of Ms. Rinehart's dissenting children, John Hancock, in his bid to take control of the trust, the New South Wales Supreme Court heard Tuesday. No further details of the affidavit from Mr. Forrest were made public.
A spokeswoman for Mr. Forrest confirmed the affidavit, but declined to elaborate. Ms. Rinehart's attorneys at Corrs Chambers Westgarth declined to comment.
Mr. Forrest and Ms. Rinehart each made their fortune from iron-ore mining in Western Australia state as Asian demand for the steelmaking material boomed. Mr. Forrest helped build Fortescue from a small explorer into the world's fourth-largest miner of iron ore over the past decade, while Ms. Rinehart's Hancock Prospecting plans to build the $10 billion Roy Hill mine in the Pilbara region in partnership with Asian steelmakers.
According to Forbes magazine, Mr. Forrest was worth $5.7 billion at the end of March. However, this is dwarfed by the $17 billion fortune of Ms. Rinehart.
News of Mr. Forrest's intervention in support of John Hancock came just days after Ms. Rinehart offered to step down as trustee of the Hope Margaret Hancock trust in an effort to bring the legal dispute to an end. The family failed to agree on a candidate in mediation last week and the case for who should take control of the trust is now before the court.
The hearing is due to continue Wednesday in Sydney.
Mr. Hancock and Bianca Rinehart sued their mother in 2011, alleging she engaged in serious misconduct as trustee by attempting to push back the date when its beneficiaries-her four children-could access the trust. Ms. Rinehart denied the allegations, claiming her children would be hit by a large capital-gains tax bill if the trust was allowed to vest.
Ginia Rinehart, another daughter, sided with her mother in the dispute. The remaining child, Hope Welker, was initially part of the action against Ms. Rinehart but withdrew earlier this year.
Hancock Prospecting--controlled by Ms. Rinehart, and 23.45% owned by the trust--has iron-ore and coal interests in Western Australia and Queensland states. She inherited it from her father, Lang Hancock, who is widely credited with discovering the Pilbara mining province, which accounts for 40% of the world's iron-ore trade by sea.
The protracted legal action was distracting Ms. Rinehart from her responsibilities as head of Hancock Prospecting and needed to be resolved for the good of the company and the family, Ms. Rinehart's attorneys said last week.
Write to Ross Kelly at firstname.lastname@example.org
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(END) Dow Jones Newswires
October 08, 2013 02:58 ET (06:58 GMT)Copyright (c) 2013 Dow Jones & Company, Inc.
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