Rinehart increases Fairfax holdings

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Australian Broadcasting Corporation

Broadcast: 01/02/2012

Reporter: Hamish Fitzsimmons



TONY JONES, PRESENTER: While media pundits weigh the Optus decision, they're also second guessing a splurge on Fairfax shares by Australia's richest person.

Mining magnate Gina Rinehart has upped her ownership of Fairfax Media, the publisher of The Age and the Sydney Morning Herald, from 5 per cent to a reported 13 per cent.

Hamish Fitzsimmons reports from Melbourne.

HAMISH FITZSIMMONS, REPORTER: Gina Rinehart is now not only Australia's wealthiest person, but a major individual shareholder of Fairfax, its websites, radio network and newspapers. Mrs Rinehart doesn't give interviews, so her intentions for her media assets are the stuff of speculation.

PAUL BARRY, JOURNALIST: People around her have said that she wants the miners to have a voice, and she's already bought into Ten and she's succeeded in having some changes there and I think Fairfax is the same - part of that same process.

HAMISH FITZSIMMONS: There's talk Mrs Rinehart may want a seat on the Fairfax board to gain influence over the company as she did after buying 10 per cent of the Ten Network last year. To do that, she'd need to buy more of the company, but still, a Fairfax board seat may be more difficult to come by.

STEPHEN MAYNE, BUSINESS COMMENTATOR: But the problem she's got is that she's conflicted because she's already a director of Ten and Ten is a competitor to Fairfax. So I doubt that Fairfax will offer her a board seat.

HAMISH FITZSIMMONS: The normally private Mrs Rinehart has made very public her opposition to the Federal Government's carbon tax legislation and its mining tax.

GINA RINEHART, HANCOCK PROSPECTING: I think our message today is going to be more "No RSPT". The mining industry really does pay its fair share of tax.

HAMISH FITZSIMMONS: Her growing media ownership has the Gillard Government concerned. Its convergence review reporting in March is looking at public interest and media diversity.

STEPHEN CONROY, COMMUNICATIONS MINISTER: Clearly she's seeking to exert her influence. But, is she breaking the law by exerting an influence? No. Many people exert influences that aren't in breach of laws. Do we need stronger laws in this area? Yes.

JOE HOCKEY, SHADOW TREASURER: The bottom line here is it has a strong board, editorial independence, and quite frankly, Gina Rinehart is a good person and a good Australian.

HAMISH FITZSIMMONS: A say in how Fairfax is run would certainly bolster Mrs Rinehart's influence in Canberra.

STEPHEN MAYNE: Politicians often, you know, kowtow to people who they fear or they perceive will have power, so even if she doesn't actually get real power to tell journalists what to write or to write headlines, the perception of power is what she's after.

HAMISH FITZSIMMONS: While some are concerned Mrs Rinehart wants to influence editorial, others like Fairfax columnist Gerard Henderson believe any investment in print these days is a plus.

GERARD HENDERSON, FAIRFAX COLUMNIST: If someone wants to invest in newspapers I would think that journalists and people who want newspapers to continue should be applauding. What I notice is among certain media circles is sort of obsession with Gina Rinehart because she wants to put some money into Fairfax Media. I would have thought that's a big positive.

HAMISH FITZSIMMONS: Fairfax shares have long been seen as underperforming and Gerard Henderson says Mrs Rinehart's business experience would benefit the company if she gains a seat on the board.

GERARD HENDERSON: Let's face it, the future of newspapers, particularly Monday-to-Friday newspapers, is doubtful in Australia, and anyone who wants to make a contribution to overcoming this problem or to alleviating this problem should be welcome.

HAMISH FITZSIMMONS: In fact, news of Fairfax's newest investor has already helped the company. Its shares jumped 10 per cent in a few hours.

Hamish Fitzsimmons, Lateline.


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