Rinehart ultimatum to Fairfax
Sat June 30, 2012 12:00am
MINING magnate Gina Rinehart has issued an extraordinary ultimatum to Fairfax chairman Roger Corbett, calling on him to resign if he fails to boost sales and turn around the ailing media company.
In an open letter sent to Mr Corbett and other Fairfax directors late yesterday, Mrs Rinehart - the company's biggest shareholder with a 19 per cent stake - demanded the board reverse "the five-year decline in paid circulation and in revenue of the Fairfax mastheads".
She also demanded the company meet "clear performance milestones" to bring the share price up to 87c, "which would represent only a 50 per cent loss from the commencement of your chairmanship in October 2009".
Fairfax shares closed the week at 55.5c - just off its Thursday low of 54c.
Mrs Rinehart says she and Mr Corbett have differed profoundly over saving the business, not the media organisation's much-touted charter of editorial independence.
Her letter yesterday came a day after the Fairfax board, led by Mr Corbett, rejected her request for three seats on the board.
The battle between Fairfax's chairman and its biggest shareholder comes against a backdrop of a huge restructure, involving 1900 job losses, closure of printing presses and a focus on digital publishing.
Mrs Rinehart yesterday denied her refusal to sign Fairfax's charter of editorial independence was the reason she and Mr Corbett had "differed so profoundly" and were unable to reach an agreement.
Instead, she asserted their differences were over "how to save a business reportedly in danger of dying". Her comments come as the Monday-Friday circulation of Fairfax's flagship Victorian newspaper The Age dropped by 14 per cent.
Mrs Rinehart also points out Mr Corbett is "only a 0.004 per cent shareholder" but has "extraordinary power as chairman".
Media analyst Peter Cox last night said, on the publisher's figures for May, Mrs Rinehart obviously had a point. He said: "She's obviously perfectly correct on all of the claims she is making, but it's also obvious the share price won't rise to 87c during that time."