Geoffrey Cousins calls on major shareholders to block Gina Rinehart from gaining a board seat at Fairfax Media.
HIGH-PROFILE director Geoffrey Cousins has called on major shareholders to block Gina Rinehart from gaining a board seat at Fairfax Media.
The Telstra director and former pay TV boss is concerned the mining magnate might attempt to exert her influence over the editorial direction of its newspapers and radio stations once on the board.
Mrs Rinehart, Australia's richest woman, this week snared a 14 per cent stake in Fairfax, owner of The Age, The Sydney Morning Herald and 3AW, making her its single-biggest shareholder.
Mrs Rinehart last year gained a board seat at Ten Network Holdings after she amassed a 10 per cent stake in the broadcaster.
''It is concerning that mining interests are seeking to control parts of the media in Australia,'' Mr Cousins said. Quite clearly there are a lot of people in mining companies, and Gina Rinehart seems to be one, who don't like anybody placing any restrictions on their activities.''
Calls to Mrs Rinehart's office were not returned yesterday.
Mrs Rinehart and her representatives are believed to have not yet contacted Fairfax about the acquisition.
Prominent Sydney fund manager Peter Morgan said he thought Mrs Rinehart's motivation was based on diversifying her investments as much as seeking influence through the media.
''Being a betting man, I think the risk-reward [for Fairfax] is weighted towards the reward,'' he said. ''I'd rather be buying [Fairfax] than BHP at $40 in terms of the cycle.''
Mr Morgan said Mrs Rinehart's arrival was a ''wake-up call'' for Fairfax, but he believed its chairman, Roger Corbett, was strong enough to ensure that if she took a board seat, she would not impose undue influence.
Peter Mansell, a former chairman of West Australian Newspapers, noted it was not easy for directors to influence the day-to-day editorial policy of a newspaper.
''In my many years on the board of The West Australian, never once did I see any attempt by anyone to influence editorial decisions,'' Mr Mansell said. ''There's no way we'd sit down at a board meeting and talk about the editor's business.''
Andrew Jaspan, a former editor of The Age said: ''The wheels of the business model will fall off if the mastheads simply become a propaganda sheet for the mining sector.''
Although he agreed that Mr Corbett was a strong chairman, Mr Cousins conceded that it was ''pretty difficult'' for independent directors to stand up against shareholders who had gained cornerstone stakes in companies.
''They are supposed to ignore those interests and simply look at the interests of all shareholders ? but it is pretty difficult in some circumstances,'' he said.
Justin Diddams, an analyst with brokerage Citigroup, said the latest developments highlighted how media assets were always in play.
''There's always a handful of wealthy individuals who covert the political influence that media assets can deliver, and Australia is no different in this regard,'' he said.
Frequently Asked Questions about this Article…
What happened when Gina Rinehart bought a stake in Fairfax Media?
The article reports Gina Rinehart acquired a 14% stake in Fairfax Media, making her the company’s single-largest shareholder. Her stake prompted public debate about whether she might seek a board seat and exert influence over Fairfax’s newspapers and radio assets.
Why are investors worried about Gina Rinehart joining the Fairfax board?
High-profile director Geoffrey Cousins and others expressed concern that mining interests could try to influence editorial direction if Rinehart joined the board. The article highlights fears that such influence could undermine editorial independence and the newspapers’ business models.
Could a director realistically control Fairfax’s day-to-day editorial decisions?
The article includes differing views: former chairman Peter Mansell said directors rarely influence day-to-day editorial policy, while critics like Andrew Jaspan warned that media outlets risk becoming propaganda for the mining sector if influence is exerted. Geoffrey Cousins also noted it can be difficult for independent directors to stand up to cornerstone shareholders.
Has Gina Rinehart served on media boards before?
Yes. The article notes that last year Rinehart gained a board seat at Ten Network Holdings after building a 10% stake in that broadcaster.
How have market figures and analysts reacted to Rinehart’s Fairfax stake?
Reactions were mixed. Geoffrey Cousins called on major shareholders to block her from a board seat. Fund manager Peter Morgan suggested her motive may be diversification and said the risk-reward for Fairfax looked attractive. Citigroup analyst Justin Diddams noted media assets are always in play because wealthy individuals sometimes seek the political influence they can offer.
Did Rinehart or her representatives comment on the Fairfax purchase?
The article says calls to Rinehart’s office were not returned and her representatives were believed not to have contacted Fairfax about the acquisition at the time of reporting.
What did Fairfax’s chairman say about the prospect of Rinehart joining the board?
While the article doesn’t quote Fairfax’s chairman directly, fund manager Peter Morgan expressed confidence in chairman Roger Corbett, saying he believed Corbett was strong enough to prevent any undue influence if Rinehart took a board seat.
What does this development mean for everyday Fairfax investors?
According to the article, the development raises governance and editorial-independence questions for Fairfax shareholders and is seen as a 'wake-up call.' Some market participants view it as a potential buying opportunity (Peter Morgan called the risk-reward skewed toward reward), while others stress the ongoing risk that wealthy shareholders could seek political influence through media assets.
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