Gina Rinehart, Australia's richest woman, has not given up her bid to gain a seat in Fairfax Media's board despite being rejected by the company. This time she has used a different tactic to gain a board seat by writing directly to retail investors.
The letter, received by Fairfax shareholders on Monday, was a litany of complaints against the company board. It was signed by John Klepec, chief development officer of Hancock Prospecting, owned by Ms Rinehart.
Mr Klepec sought investors' support to force Fairfax Chair Roger Corbett to put in place performance benchmarks, allow directors a choice if they agree to an editorial independence charter and two seats for Ms Rinehart.
"We have never sought control of Fairfax Media. We have only requested two directors and an experienced independent director, which even if combined is clearly a minority position on the board," The Australian quoted the letter.
"We are concerned that the process of being invited onto the board has taken many months and that during this period Fairfax has continued to decline and its chairman, with his diminutive shareholding, has continued not to purchase more Fairfax shares to demonstrate his faith in his and the board's control and direction," Mr Klepec pointed out.
Mr Corbett has only 0.004 per cent stake in Fairfax while the directors own only a total of 0.15 per cent share. Even if Ms Rinehart had actually reduced her share by selling some of her stocks, she is still the largest shareholder with a 15 per cent share.
Poor advertising revenue and declining subscriptions have led Fairfax Media to put in place major changes such as shifting to digital platform for some of its mastheads, reducing size to tabloid, cutting jobs and having some copyediting functions performed offshore in New Zealand.
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