Side-tracked only slightly by the latest events in Canberra, we are back this week to investigating Gina Rinehart and her “staggering largesse” towards the IPA, Barnaby Joyce and a mysterious entity called the “CEF Trust”.
EXCERPT FROM PART ONE
Bianca Rinehart and her brother, John Hancock, are beneficiaries of the Hope Margaret Hancock Trust, which owns 23.4per cent of Gina’s vast mining company, Hancock Prospecting. Bianca wrested control of this $5 billion Trust in 2015 from Gina’s hard Pilbara-encrusted hands.
This was a full-scale blue, as you can imagine and as the Sydney Morning Herald reported on 28 May 2015:
‘Justice Brereton said Mrs Rinehart had gone to extraordinary lengths to maintain control, either directly or indirectly of the trust, and had exerted "enormous pressure and great influence to do so".’
Bianca then went through the books and ‒ surprise, surprise! ‒ it looked like the Trust’s inflow pipe from Hancock Prospecting Pty Ltd might have been squeezed. Intentionally.
The daughter took her mother took court to reach a resolution. On 5 and 6 July 2018, the matter was heard before Her Honour Justice Julie Ward in the Equity Division of the NSW Supreme Court.
According to Justice Ward:
Relevantly, for present purposes, it is alleged that Gina breached her duties as a director by exercising her powers and/or duties as a director or officer of HPPL [Hancock Prospecting Pty Ltd] to cause HPPL to enter into contracts and to pay out its corporate funds: otherwise than in good faith in the best interests of HPPL as a whole; improperly to gain an advantage for herself; improperly to cause a detriment to HPPL; other than for a proper purpose; and without the degree of care and diligence that a reasonable person would exercise if he or she was a director or officer of HPPL in HPPL’s circumstances and held the offices and had the responsibilities that Gina had.
Bianca wanted to know why Gina had seen fit to donate money to causes like, for example, the Institute of Public Affairs.
Her Honour stated:
In the schedule of HPPL donations and sponsorships provided to Bianca’s solicitors, it is disclosed that HPPL paid or provided amounts to IPA in a total of $2.3 million for the 2016 financial year and $2.2 million in the 2017 financial year. The annual reports of IPA for those years do not mention HPPL as a donor and the figures set out in the reports record that the vast majority of donations were received from individuals. Bianca submits that the inference to be drawn therefrom is that Gina herself has been credited by IPA for HPPL’s donations. Bianca also points to the fact that IPA has not answered Bianca’s queries as to how HPPL’s donations have been used.
Read the rest of Part One: ‘How Gina Rinehart bought the IPA’ HERE.
The start of a new investigation by Ross Jones and me:
— Dave Donovan (@davrosz) August 1, 2018
'How Gina Rinehart bought the IPA' https://t.co/6DYT87eYE3 @IndependentAus @RPZJones
PART TWO: GINA RINEHART AND THE CEF TRUST MILLIONS
APART FROM throwing light on Gina Rinehart’s staggering largesse to newthink tank IPA, the matter of Rinehart v Rinehart [2018] NSWSC 1102, currently before the NSW Supreme Court, offered other tantalising pieces of information.
In her case against Gina, Rinehart scion Bianca lodged three information-seeking subpoenas against three parties – the IPA, Barnaby Joyce and an entity no-one had ever previously heard of, The CEF Trust.
Independent Australia was at the Supreme Court over the last two weeks and can report that, sadly, Her Honour, Ward CJ, denied all three subpoena requests.
Accordingly, we get no further glimpses inside the IPA books and nor will we see what possible baggage Gina’s $40,000 cheque to Barnaby might have been carrying.
But, as a small compensation, the third subpoena – sadly also denied by Her Honour - was for information about a very low-key entity called the CEF Trust.
Bianca wanted to know why, in the period 2015 to 2017, Gina donated $4 million to this unknown operation.
IA would also very much like to know the answer to this question. Especially given the several unusual features of this organisation.
Her Honour stated:
By way of background, CEF is a company incorporated in Victoria in 2014, whose principal place of business is in Adelaide and whose sole shareholder and director is a solicitor based in Adelaide (Mr Charles Bailes), the managing partner of the firm Tindall Gask Bentley Lawyers (see ASIC extract, Exhibit C p 107; email dated 20 March 2018 from Mr Bailes to Bianca, Exhibit C pp 109-111).
Mr Bailes (in the email to which I have just referred) has confirmed that CEF is the trustee of the CEF Trust and that the role of CEF, as trustee, “is of course to further the purposes of the CEF Trust”. Those purposes have not been articulated to Bianca (nor to this Court).
A schedule of donations and sponsorships paid or provided by HPPL for the financial years ending 30 June 2015-2017 (provided to Bianca’s solicitors by the solicitors acting for HPPL) lists donations to CEF as trustee for the CEF Trust in a total of $2.5 million for the 2015 financial year and $1.5 million in the 2017 financial year.
Charles Morland Bailes – known to all as Morry – is not just managing partner of the firm Tindall Gask Bentley Lawyers, he is also president of the Law Society of Australia.
Morry Bailes: @thelawcouncil supports the idea of having a national integrity assessment. MORE: https://t.co/7MAXuXV833 #SkyLiveNow pic.twitter.com/mod20naTgg
— Sky News Australia (@SkyNewsAust) February 4, 2018
According to his bio on the National Press Club of Australia website:
‘Mr Bailes’s firm is the largest family law and plaintiff practice in South Australia, also practising in the areas of succession, workplace and criminal law.’
So what does the CEF Trust do?
According to Bianca’s lawyer, on 13 March 2018, Bianca sent Bailes an email asking that very question.
A week later, Bailes replied:
The role of CEF Pty Ltd as trustee is of course to further the purposes of the CEF Trust, and it is not necessarily consistent with that role to provide that information to individual shareholders (even if they are substantial shareholders) of companies which may have provided funds to the trust as to do so may prejudice the possibility of future donations from those companies.
That sentence implies two things. Firstly, that the Trust is some form of charitable organisation, which accepts donations. And secondly, that Gina was not the only donor to the CEF Trust.
But the problem with this is that the CEF Trust is not a charity, as Justice Ward noted:
Searches of State, Territory and Federal registers of charities that Bianca’s solicitor, Mr Timothy Price, has caused to be conducted have not enabled him to locate any reference on those registers to the CEF Trust (though he has deposed that there is a reference to two other similar entities in Western Australia and Tasmania styled “The Trustee for the CEF Trust” – those entities, however, having different ABNs to that of CEF).
There is, in all probability, a perfectly straightforward reason why Australia ‘s richest woman and IPA benefactor donated $4 million to a company whose sole director and company secretary is possibly Australia’s most powerful lawyer, whose firm specialises in family law.
It should also be noted that Morry Bailes is a member of the South Australian Liberal Party State Executive, a donor to the Liberal Party and a Liberal Party lawyer.
And when I say membership (re Morry Bailes) I mean on the State Executive of the SA Liberal Party & donor @indaily
— Tom Koutsantonis (@TKoutsantonisMP) March 11, 2016
We are not suggesting there is anything improper about Gina’s donations to the opaque CEF Trust, nor are we suggesting the parties involved behaved in anything less than a scrupulously legal way.
Just that it does seem odd that Gina Rinehart, who is being sued by for not sharing the proper proceeds of Hancock Mining with a family trust, appears to be siphoning millions of dollars of Hancock money into another Trust run by a Liberal Party lawyer and family law specialist.
The matter needs to be cleared up before people begin to reach the wrong conclusions.
This story was co-written by Sydney bureau chief Ross Jones and managing editor Dave Donovan. You can follow Ross and Dave on Twitter @rpzjones and @davrosz respectively. Follow Independent Australia on Twitter at @independentaus and on Facebook HERE.
This editorial was originally published in our weekly subscriber only newsletter and in the IA members only area. But this is only part of the story.
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