London Calling dives down under, discovering soap galorePublished by MAC on 2015-02-11
Source: Nostromo Research (2015-02-08)
Rio Tinto's sordid Australian legacy
Gina Rinehart is not only Australia's richest woman, but also the world's wealthiest female to derive a fortune from mining.
This isn't because she's deigned to turn over a single sod in pursuit of any metal or mined material.
In fact, the dollars simply fell into her lap, on the death of her father, Lang Hancock - billions of them.
All the same, she's recently been embroiled in a disasteful and extended brawl over some of these assets with members of her own family.
Lang Hancock teamed up with another prospector called Peter Wright during the 1960's, after claiming he'd "discovered" the largest iron ore
deposit in the world in Western Australia's Pilbara region.
Wright died in 1985, and the blustering Hancock outlived him by seven years. The pair sealed an agreement in 1962 with Rio Tinto (RTZ-CRA as it was then known) to take over the Pilbara leases, and thereby gained an annual multi-million dollar royalty.
This golden egg has continued feeding the high-living of the two dynasties - fathers, children and grandchildren - for the past fifty three years. It's also fed numerous tussles between family members (not to mention with outsiders).
To date, any war over Wright's inheritance from the original Hancock-Wright-Rio Tinto deal has been overshadowed by controversies between the larger-than-life Ms Rinehart and her own relatives.
Now, Olivia Mead, a 19 year old grand-daughter of Peter Wright, has leaped into the spotlight, claiming Aus$12 million of the family's wealth, thus setting her in confrontation with two half-siblings (see article below).
According to The Australian: "Peter Wright died with a fortune of more than $1 billion, generated largely from the fat royalty cheques he banked
each year — a legacy of the royalty deals negotiated by the Hancock-Wright partnership with Rio Tinto subsidiary Hamersley Iron in the 1960s".
All this complex, quasi-incestuous, and often laughable, wrangling over who grabs what, could supply scripts for an Australian TV soap opera which
would make "Home and Away" (transmitted on TV worldwide since 1987) pale into insignificance.
But it's hardly the stuff of light entertainment.
The profits over which these faintly ridiculous individuals have long been arguing derive from territory purloined from Aboriginal peoples, with
barely a cent paid to those communities in compensation.
And that stark reality is one about which the broad Australian public just doesn't want to hear.
She’s a rich girl ... has she gone too far?
7 February 2015
LANG Hancock and Peter Wright were Australia’s most successful mining prospectors. But the rugged pair lived in an era when business deals were done with a firm handshake and disagreements were solved without lawyers or judges.
It wasn’t until the final years of their hugely lucrative partnership that the two old schoolmates realised this informal arrangement had caused them problems and might create even bigger headaches for their children and grandchildren.
In a letter to Wright in 1982, Hancock wrote: “We will both have to do our best to solve the problems right away rather than pass on the mess to the next generation — a mess which, if not properly handled, could result in lawyers getting a large share of the pickings.’’
More than three decades later, the Pilbara iron ore pioneers — men of simple tastes — would turn in their graves at the millions of dollars being spent on lawyers’ fees as their descendants continue to fight over the spoils of their hard work and good luck.
This week, Wright’s granddaughter, Olivia Mead, emerged as the latest heir determined to get her hands on more of the family’s billion-dollar wealth.
The 19-year-old Perth university student strolled into the West Australian Supreme Court on Monday with an audacious $20 million wish list of luxury items and lavish allowances she argued should be paid from the estate of her father, Michael Wright (Peter Wright’s eldest son), who died in 2012.
The teenager’s list of demands includes a “cosy” house worth $2.5m, a $US1.2m ($1.53m) crystal-covered grand piano, a $250,000 diamond-encrusted bass guitar (the world’s most expensive) as well as an Audi A4 and a Toyota Tarago van for when she has children.
She also wants Michael Wright’s estate to pay for a $100,000 wedding, $10,000 a year for life for fashion accessories, $40,000 a year for holidays, $150 a week for wine and more than $20,000 each year to keep a dog, a rabbit, a ferret and an axolotl, otherwise known as a Mexican walking fish.
And in a claim that would make even Imelda Marcos blush, Mead says she also wants five pairs of $5000 shoes every year and another 20 pairs of $300 shoes every year for the rest of her life.
Mead, the court was told, had compiled the list by estimating all of her needs for the next 70-odd years. She says she plans to have four children (each two years apart) once she has finished her public relations degree at Perth’s Notre Dame University and begins a career.
The Supreme Court heard Mead’s total demands came to about $20m — but this was later whittled down to $12m after her lawyers agreed she could do without some of the extravagances, including the Kuhn-Bosendorfer grand piano and the Ritter Royal Flora Aurum guitar.
If granted, Mead’s demands for a lump sum would likely represent the biggest court-ordered payout from an estate awarded in Australia.
Peter Wright died in 1985 — just three years after the prescient warning from Hancock, who died in 1992.
Ever since, the Hancock and Wright dynasties have been embroiled in enmity. If they’re not fighting each other over money, they are usually fighting among themselves.
Hancock’s billionaire daughter, Gina Rinehart, has famously faced off in the nation’s courtrooms against her own estranged children — an ugly saga that continues with various twists and turns — and her former stepmother, Rose Porteous. Both of these disputes involved claims over the wealth generated by the Hancock-Wright partnership.
Yet, until this week, the intensely private Wright clan had managed to avoid the scandal and spectacle of the Rinehart family feuds.
Although no strangers to litigation, Peter Wright’s three children — Michael, Angela and Julian — generally kept out of the limelight and little was known about their private lives.
Mead’s legal claim against Michael Wright’s estate would have been remarkable in itself. What made it more fascinating, however, is that until this week Mead’s status as the daughter of one of Australia’s richest men was virtually unknown.
Observers of the Wright family had believed that Michael had fathered only three heirs during his lifetime.
Those three children — Leonie Baldock, Alexandra Burt and Myles Wright — were all born during Wright’s marriage to Jennifer Wright, who died last year.
Two of them, Baldock and Burt, are now heavily involved in running the Wright family empire, including its mining interests and the successful Voyager Estate winery in Margaret River, and were in court this week as defendants in the case brought by their half-sister.
A family source notes Baldock and Burt are fighting the case to “defend their father’s honour”.
Another says the family would be mortified by some of the “dirty linen” aired during the four-day civil trial. The two women do not appear to lead lavish lifestyles despite their wealth.
Mead was born in 1995, the product of a fling between Michael Wright — an offbeat but engaging man who was married four times — and a Perth woman, Elizabeth Mead.
Wright had long ago acknowledged Olivia Mead as his daughter. In his will, he left her a $3m trust fund that she can’t touch until she turns 30.
But this isn’t enough for Mead, who feels she was short-changed in the will compared with her half-siblings.
The court heard that Wright’s musician son, Myles, 36, receives an income of $650,000 a year and is entitled to a $15m inheritance payable in 2017.
Lawyers for Mead, who originally launched the legal action in December 2012 when she was only 17, described her claims as reasonable. Lindsay Ellison SC, representing Mead, said his client was not a “spoiled child” and “had very little money spent on her”.
“It is not excessive,” he said. “It is a large lump sum that has to last a lifetime.”
But Jane Needham SC, representing the defendants, said the $3m left to Mead had been carefully considered by Wright and was more than ample.
“It’s more than she could possibly earn in a lifetime,” she said.
Public sympathy is unlikely to fall with Mead in this case, but that didn’t mean Michael Wright’s other daughters had an easy time in court.
Burt, 41, who runs Voyager Estate, was grilled about her father’s parenting style, revealing that he could be “somewhat” brutal and at times neglected what could be considered his parental obligations.
Wright ruled his household by calling family meetings that often required formal agendas and note-taking. On one occasion, Burt even wrote her father an official memo about her plans to join a tennis club.
Burt, who earned an arts degree, alluded to further tensions by saying Wright preferred his children to study “traditional” subjects such as accounting, law and commerce.
But Wright was a figure of contradiction and some complexity. Through a family spokeswoman, Burt noted yesterday that she had also described her father during her eulogy at his funeral as “extraordinary, generous, funny, down to earth and irrepressible”.
(In a sign of Wright’s standing, the funeral was attended by federal Liberal Party deputy leader Julie Bishop, Perth billionaire Stan Perron, National Australia Bank chairman Michael Chaney and Rio Tinto boss Sam Walsh).
Wright died with a fortune of more than $1 billion generated largely from the fat royalty cheques he banked each year — a legacy of the royalty deals negotiated by the Hancock-Wright partnership with Rio Tinto subsidiary Hamersley Iron in the 1960s.
With the surge in demand for iron ore during the past decade, the royalties paid to Wright and his reclusive sister Angela Bennett — as well as to Gina Rinehart — swelled to tens of millions of dollars annually.
Despite being a teetotaller, Wright spent most of his time working at his beloved Voyager Estate, developing the spectacular gardens, wine cellar and vineyards during the final 20 years of his life.
Visitors to the winery would find him pruning the roses or doing other odd jobs, usually wearing his trademark khaki shorts and floppy hat.
Yet his life was not always carefree. Nor was he immune from brawling over family money. Wright fell out badly with his sister Angela over the direction of the family company they inherited from their father.
But that did not stop the siblings joining forces in 2001 to sue Rinehart’s company Hancock Prospecting over a 25 per cent stake in the massive Rhodes Ridge iron ore tenement in the Pilbara.
In 2010, the West Australian Supreme Court sided with the Wright heirs and stripped Rinehart of the asset, finding that Hancock had promised it to Peter Wright as part of one of their handshake deals.
Michael Wright and Bennett were also sued at one stage by the children of their brother, Julian, who — like Mead — were claiming a bigger slice of the family fortune. That action was settled with a $50m payment to Julian Wright’s children. (Julian had sold his one-third interest in family company Wright Prospecting for $6.8m to Michael and Angela after Peter Wright’s death.)
For now, the “mess” created by the informality of Hancock and Wright’s business dealings shows no sign of being cleaned up, as the next generation racks up multimillion-dollar legal bills.
Wright Prospecting — of which Burt became a director after her father’s death — is doggedly pursuing legal action against Rinehart’s Hancock Prospecting and is seeking a greater slice of the magnate’s Hope Downs iron ore project in the Pilbara. Hearings will resume in coming weeks.
For Mead, judgment day will come in the next few months when Master Craig Sanderson rules on her claim against her father’s estate. Until then, she will have to make do with life in the unremarkable Perth suburb of Cannington and her dreams of a fairytale life of travel, fine wine and expensive shoes.