CBA funds sold Fairfax stock to Rinehart

FUNDS managers under Commonwealth Bank's umbrella are the first to identify themselves as significant sellers of Fairfax Media shares to mining magnate Gina Rinehart.

By InvestSMART · 21 Jun 2012

By InvestSMART ·
21 Jun 2012

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FUNDS managers under Commonwealth Bank's umbrella are the first to identify themselves as significant sellers of Fairfax Media shares to mining magnate Gina Rinehart.

A substantial shareholding notice filed yesterday by CBA disclosed that they had sold more than 55 million shares last Thursday and Friday when brokers acting for Mrs Rinehart were increasing her holding to 18.67 per cent of Fairfax.

The net reduction in its shareholding since the last time it made a statement in early February was a smaller number of shares because some funds had also bought shares in the interim. That February notice from CBA was also about a reduction in its holdings, and in part stemmed from selling shares to Mrs Rinehart's Hancock Prospecting group. Overall, holdings in Fairfax attributable to funds under CBA's control, most of them within the Colonial First State group, fell from 11.04 per cent to 8.88 per cent of the media group.

CBA's notice points out that 1.4 percentage points of that Fairfax stake are managed by external groups that take their own decisions on buying and selling stocks.

Mrs Rinehart won the Commonwealth Bank Business Owner Award in 2009, a subset of the Telstra Business Women's Awards where she won the overall prize that same year.

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Frequently Asked Questions about this Article…

Who sold Fairfax Media shares to Gina Rinehart?

Funds managers under the Commonwealth Bank (CBA) umbrella identified themselves as significant sellers of Fairfax Media shares, with many of those holdings managed within the Colonial First State group.

How many Fairfax shares did CBA-managed funds sell to Gina Rinehart?

CBA disclosed that its funds sold more than 55 million Fairfax shares over a Thursday and Friday period while brokers acting for Gina Rinehart were increasing her holding.

What stake did Gina Rinehart reach in Fairfax Media after those purchases?

After the purchases, Gina Rinehart’s holding in Fairfax Media increased to 18.67% of the company.

How did CBA’s overall holding in Fairfax change following the sales?

Holdings in Fairfax attributable to funds under CBA control fell from 11.04% to 8.88% of the media group, although the net reduction since early February was smaller because some CBA funds bought shares in the interim.

Were all of the Fairfax shares under CBA control directly managed by CBA?

No. CBA’s notice said that 1.4 percentage points of its Fairfax stake are managed by external groups that make their own independent decisions on buying and selling stocks.

Did CBA previously sell Fairfax shares to Gina Rinehart’s Hancock Prospecting?

Yes. CBA’s February notice also described a reduction in holdings that in part stemmed from selling shares to Mrs Rinehart’s Hancock Prospecting group.

Which CBA business unit held most of the Fairfax shares?

Most of the Fairfax holdings attributable to CBA were within the Colonial First State group, which manages many of CBA’s investment funds.

Is there any background on Gina Rinehart mentioned in the article?

The article notes that Mrs Rinehart won the Commonwealth Bank Business Owner Award in 2009, a subset of the Telstra Business Women’s Awards, and she also won the overall prize that year.