THE DISTILLERY: Rinehart rumblings

A jotter looks at the company control issues facing Gina Rinehart, while another highlights shareholder disquiet at Leighton.

It’s easy to forget that Gina Rinehart’s court battle with her children isn’t about winning hearts and minds, but maintaining absolute control of Hancock Prospecting. The Australian’s Andrew Burrell explains how difficult things might get for Rinehart if she has to explain to important equity investors that she no longer exerts such control over the company. Meanwhile, The Age’s Adele Ferguson finds an appetite amongst minority Leighton Holdings shareholders for board renewal – an appetite major shareholder Hochtief will certainly suppress – while the concept of business travel etiquette comes up for crucial analysis.

But first, The Australian’s Andrew Burrell says Gina Rinehart’s feud with three of her four children could do much more than just embarrass her and also comes at a crucial time for Hancock Prospecting, with equity investors starting to enter the fold.

"But the global banks and possible investors that fund most of Roy Hill are doubtless examining media clippings from the court case to try to work out whether Rinehart will remain in control at Hancock. Three of the billionaire's children – John Hancock, Bianca Rinehart and Hope Welker – are trying to win control of almost a quarter of the company that has been ruled by their mother with an iron fist for 20 years. If they succeed, and that will be a matter for the courts to decide, Hancock's equity partners in Roy Hill may wake up one day to discover that Gina Rinehart no longer speaks for 100 per cent of the company.”

The Age’s Adele Ferguson reveals yet more details about the problems at Leighton Holdings and finds a sense of disquiet among some minority shareholders about the company’s board.

"With such turmoil over the past 19 months it is hard to have confidence that the hundreds of other projects that make up Leighton's $45 billion work in hand are running smoothly, despite what new boss Hamish Tyrwhitt says. For instance, there are concerns that the contract to sell 35 per cent of Leighton India to Welspun last year resulted in an onerous set of conditions that could one day blow up in Leighton's face. And there are concerns about whether the Chenani-Nashri road-tunnel project in the lower Himalayas in Indian Kashmir can be completed in time. Against this backdrop, shareholders will vote on the re-election of Drescher, who joined the board in 1996, and Osborn, who joined the main board in 2008 after serving on the group's subsidiary board, Thiess, from 2005.”

The Australian Financial Review’s Chanticleer columnist Tony Boyd finds a terribly disappointing turnout of Australian companies submitting their perspectives to the white paper on Australia in an Asian century.

"By the time written submissions closed last Friday, just these four Australian companies had made the effort to put their views: Australia and New Zealand Banking Group, ASX Group, Insurance Australia Group and Rio Tinto. They rightly regarded it as critically important to put their opinions in their own words directly to the taskforce, which is headed by former treasury secretary Ken Henry. It should be said that submissions were made by various industry bodies representing many companies in the top 150, including the Business Council of Australia, the Australian Chamber of Industry and Commerce, the Australian Industry Group, the Australian China Business Council and the Australia China Council. But these organisations are the distilled views of many voices. It is disappointing and somewhat bewildering that so few companies with significant interests in the region’s economic and strategic future have not got involved in a process that will shape government policies for the next five years."

The Sydney Morning Herald’s Michael Pascoe delivers this essential warning about the boganisation of Australian business travellers.

"To the bloke in Row 27 on QF 417 last Tuesday: poor form, son, poor form – only the ignorant, the boorish, the self-obsessed or the totally bogan tilt back an economy seat on a domestic flight when there is someone behind them. And a decent chap or chappette thinks twice about it in business class as well. I'll give the anonymous traveller the benefit of the doubt and try to just think him ignorant – but I wasn't the poor devil sitting behind as the seat came back, pushing the newspaper into the victim's chest, making the hour more unpleasant than it has to be.”

Sticking with the skies, The Sydney Morning Herald’s Ian Verrender argues that Qantas chief executive Alan Joyce has been engaged in cost cutting, rather than actually turning the carrier’s fortunes around.

In other company news, Fairfax’s Insider columnist Ian McIlwraith piles on PaperlinX, while The Australian’s Tim Boreham looks at Geodynamics, GrainCorp, Flight Centre and Avita Medical in his Criterion column.

Chanticleer columnist Boyd finds analysts increasingly leaning towards a downsizing of National Australia Bank’s UK operations, rather than a full sale.

The Australian’s Glenda Korporaal says Sydney’s David Gonski is a worthy successor to David Murray as chairman of the Future Fund, but wonders why his appointment appears so haphazard. The same newspaper’s Peter van Onselen explains how Prime Minister Julia Gillard is attempting to woo small business voters, chiefly by putting her Small Business Minister Brendan O’Connor in her cabinet, while Judith Sloan dispels some of the myths surrounding means testing.

In economic news, The Age’s Tim Colebatch says the Reserve Bank is setting interest rates for the mining sector, not the broader economy. And finally, The Australian Financial Review’s Matthew Stevens looks at Greek bond opportunities.


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