Call to block Rinehart's board bid
HIGH-PROFILE director Geoffrey Cousins has called 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.