23.8 C
Byron Shire
May 18, 2022

Rinehart should tread carefully at Fairfax

Latest News

Tripling water harvesting may leave local communities dry

The NSW government was looking to do catchment by catchment analysis to determine the risk to local water supply and rivers from the new rules on water harvesting rights.

Other News

Rooftop dining in the centre of Byron

Simon Haslam Last Friday I went up for a few drinks with friends at the relatively new rooftop dining area...

Interviews with Richmond candidates 2022: Independent Terry Sharples

Terry Sharples is a retired accountant living in the Tweed Shire and running as an Independent for the federal...

Homelessness hub under immense pressure

A new homelessness hub in Byron Bay has been so inundated with requests for help, that the service already needs additional staff to meet the demand.

Tripling water harvesting may leave local communities dry

The NSW government was looking to do catchment by catchment analysis to determine the risk to local water supply and rivers from the new rules on water harvesting rights.

First residents move in to Wollongbar housing pods

The first residents displaced by the flooding disaster have now received the keys to their temporary housing pods at Wollongbar, Ballina Council says.

Entertainment in the Byron Shire for the week beginning 18 May, 2022

Brilliant entertainment always in the Byron Shire

Crikey’s Stephen Mayne looks at the various media options facing mining mogul Gina Rinehart and their likely outcomes.

Journalists love nothing more than speculating about the future of media companies, so Gina Rinehart has created an avalanche of commentary with her high-profile raid on Fairfax Media. We’ve had everything from Paul Barry saying she will almost certainly score a board seat to Michael West speculating she’ll swap her stock for the newspaper division and Alan Kohler saying she’ll end up frustrated and out of pocket.

Personally, I prefer the theory that Rinehart was so outraged by Jane Cadzow’s extremely tough Good Weekend cover story on January 21 that she’s out for revenge, not unlike the way Kerry Packer stalked Fairfax for years courtesy of the Goanna saga.

Having dropped more than $100 million on her previous $300 million bet on stakes in Fairfax and Network Ten, it is also significant that she has just inked a lucrative deal with South Korean steel giant Posco, which paid $1.5 billion for an additional 11.25% stake in Rinehart’s Roy Hill iron ore project south of Port Hedland

However, it is wrong to assume this constitutes cash in Rinehart’s pocket because Roy Hill is expected to cost $7 billion to develop with first production not scheduled until 2014. The valuation may also be inflated for tax reasons, with Posco clawing back value through a discounted supply agreement. I very much doubt Rinehart has the capacity or appetite to risk ploughing $4 billion of real cash into a full takeover of Fairfax.

But without full control, where does she go? Any Fairfax director, shareholder or journalist who read Cadzow’s Good Weekend profile would be horrified at the prospect Rinehart could influence the venerable publishing house as a director.

While conflicts of interest seemingly didn’t matter when the four billionaires — James Packer, Lachlan Murdoch (post-inheritance), Gina Rinehart and Bruce Gordon — swooped on Network Ten, a Fairfax board seat will be an entirely different proposition.

Once Ten’s executive chairman Nick Falloon was rolled and his non-executive successor, Brian Long, agreed that Packer and Murdoch could have two boards with their combined 20% stake, it was difficult to resist representation arguments from Rinehart and Gordon.

Incredibly, Gordon was allowed to appoint a lawyer to represent him even though he owns Channel Nine in Adelaide and Perth, which directly competes against Ten. Talk about being blind to conflict of interest.

Fairfax is in a different place after suffering the embarrassment of having ACMA force David Evans off its board in 2009 due to conflicts of interest and regulatory breaches from his status as a director of Village Roadshow, back when it still controlled Austereo.

Even former Fairfax chairman Ron Walker, who has navigated through numerous personal conflicts of interest over his career, saw red when deputy chairman Mark Burrows thought it was fine to advise Lachlan Murdoch on his proposed 2008 takeover of Consolidated Media Holdings. He resigned a few days later acknowledging the perception problems.

Given all this history, current Fairfax chairman Roger Corbett has the easy out by pointing to the obvious conflict of interest that the Ten directorship creates for Rinehart if she does indeed aspire to join the board.

A more likely scenario would be Rinehart attempting to engineer a merger between Ten and Fairfax in which she emerges as the largest shareholder with 20% and a board seat. But that would also be messy.

Another feasible alternative would be for Rinehart to trade her Fairfax stake for the company’s radio assets which can be easily separated from the newspaper and digital divisions and were recently on the market until 2GB owner John Singleton failed to come up with a realistic offer, despite rumours he tried to put together a joint bid with Rinehart.

Having developed close friendships with numerous conservative MPs, it is clear that Rinehart is pushing hard to help remove the Gillard government and receive greater regulatory, tax and infrastructure support for her West Australian resources projects.

The unions will fight this one to the death given her support for importing cheap foreign guest workers to build her projects.

As for whether the Fairfax raid will work, I think she’s made a big mistake by putting a giant target on her back. And with three of her children litigating to remove her from the family trust, now is not the time to be be saying, “look at me”.

With buffoons such as Clive Palmer, Twiggy Forrest and Rinehart now worth an estimated $40 billion and all throwing their eccentric weight around, Kevin Rudd could mount a very strong case for a return to the Lodge and a far more aggressive mining tax proposal than Gillard’s pathetic compromise.

After all, if Labor really wants to return to surplus next year and help fund pet projects such as wage rises for community workers, the mining industry could comfortably contribute at least $10 billion a year more in tax while still delivering for its largely foreign and billionaire owners.

Previous articleMandy’s Soap Box #65
Next articleWheelchair Tennis

Support The Echo

Keeping the community together and the community voice loud and clear is what The Echo is about. More than ever we need your help to keep this voice alive and thriving in the community.

Like all businesses we are struggling to keep food on the table of all our local and hard working journalists, artists, sales, delivery and drudges who keep the news coming out to you both in the newspaper and online. If you can spare a few dollars a week – or maybe more – we would appreciate all the support you are able to give to keep the voice of independent, local journalism alive.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

SCU to house temporary accommodation for flood-affected residents

Temporary homes will be located at Southern Cross University (SCU) Lismore Campus as part of the NSW government's program to provide 800 temporary housing options for flood-affected people.

Secret agreements and done deals

Government and Byron Council refuse to explain details around temporary accommodation plans

Sue Higginson MLC: a woman on a mission

Local mother, grandmother, partner, activist, farmer, and lawyer, Sue Higginson, can now add NSW MLC Senator to her list of hyphenates.

One Nation ‘ghost’ haunting Richmond

Less than a week out from the election, mystery surrounds the One Nation candidate and her connection to the electorate.