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 stake did Gina Rinehart buy in Fairfax Media and which titles does Fairfax own?
Gina Rinehart this week acquired a 14% stake in Fairfax Media. Fairfax is the owner of major mastheads and outlets including The Age, The Sydney Morning Herald and radio station 3AW.
Why are some directors calling on shareholders to block Gina Rinehart from a Fairfax board seat?
High‑profile director Geoffrey Cousins and others are worried that a large shareholder with mining interests could try to influence editorial direction if given a board seat. The call to block a board bid reflects concerns about media independence and the potential for undue influence over newspapers and radio stations.
Has Gina Rinehart previously taken board positions after buying stakes in media companies?
Yes. The article notes that last year Gina Rinehart gained a board seat at Ten Network Holdings after amassing a roughly 10% stake in that broadcaster, which is cited as precedent for shareholder board bids.
Can a major shareholder realistically control a newspaper’s day‑to‑day editorial policy?
Views in the article are mixed. Former West Australian Newspapers chairman Peter Mansell said directors typically do not influence day‑to‑day editorial decisions, while former editor Andrew Jaspan warned that if mastheads became propaganda for a specific sector the business model would suffer. The piece highlights both the practical limits on board interference and the legitimate concerns about influence.
How have fund managers and analysts reacted to Rinehart’s Fairfax stake?
Prominent fund manager Peter Morgan suggested Rinehart’s move may be driven by a desire to diversify investments and saw potential upside for Fairfax, calling the move a ‘wake‑up call’ but expressing confidence in chairman Roger Corbett. Citigroup analyst Justin Diddams noted the episode underscores how media assets are often attractive to wealthy individuals seeking political influence.
What did the article say about Fairfax’s chairman Roger Corbett in relation to the Rinehart stake?
The article reports that Peter Morgan believes Fairfax chairman Roger Corbett is strong enough to ensure that, even if Rinehart took a board seat, she would not be able to impose undue influence on the company’s editorial direction or operations.
What immediate response was reported from Gina Rinehart or her representatives after the Fairfax stake was revealed?
The article states that calls to Gina Rinehart’s office were not returned, and her representatives were believed not to have yet contacted Fairfax about the acquisition at the time of reporting.
What should everyday investors watch for after a major shareholder like Rinehart buys into a media company?
Based on the article’s coverage, everyday investors should monitor whether the shareholder seeks a board seat, any statements from the company’s leadership (for example the chairman), and commentary from directors and analysts about governance and editorial independence. The development has been described as a ‘wake‑up call’, so investors may want to follow news and official corporate disclosures closely.
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