Dividends an insight into Rinehart empire
DIVIDEND payments of more than $12 million flowed to mining billionaire Gina Rinehart and her family trusts in 2011, according to documents that shed new light on the operation of her main company, Hancock Prospecting.
The rare insight into Ms Rinehart's tightly held business empire came after Hancock finally responded to demands from Australia's corporate watchdog to publish two years' worth of long-overdue financial statements.
Hancock has spent more than a year contesting the Australian Securities and Investments Commission's demand for the reports - for the 2010 and 2011 financial years - to be submitted, but finally dropped its appeal claim on Christmas Eve.
The reports for those two years were submitted to ASIC on the same day and were revealed by BusinessDay on Friday.
Hancock had argued that release of the information would reveal commercially sensitive details about the business' current operations and damage its bargaining power.
Many observers also believe the details of massive profits being made by Hancock could be sensitive in the context of Ms Rinehart's legal battle with some of her children over the control of family trusts linked to the company.
The documents reveal the period between 2008 and 2011 was particularly lucrative for Hancock, which earns most of its money through an iron ore joint venture with Rio Tinto.
Profits rose from $225 million in June 2009, to $688 million at June 2010, to just under $1.2 billion at June 30, 2011.
The private, unlisted company paid dividends of $6.1 million at June 30, 2010, and more than doubled that figure to $12.49 million a year later.
The ownership structure of Hancock is split between Ms Rinehart and several trusts and investment vehicles linked to the family.
Documents suggest Ms Rinehart is in control of at least some of those trusts, which are believed to hold just under 20 per cent of the shares in Hancock.
Three of Ms Rinehart's estranged children are expected to push ahead with legal action this year in a bid to remove Ms Rinehart from her controlling position in those trusts.
The documents also show that by June 2011, Hancock Prospecting owned 100 per cent of 39 subsidiary companies.
Hancock Prospecting owns about 70 per cent of Roy Hill Holdings, the company through which Ms Rinehart is seeking to build the nation's next big iron ore mine, rail and port project.
Hancock director Tad Watroba declined to comment on the release of the documents when contacted on Friday.
Hancock Prospecting is a substantial shareholder in Fairfax Media, the owner of this publication.
InvestSMART FORUM: Come and meet the team
We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free