'Don't trash Fairfax' – Aussie communications minister warns Rinehart
Australian Communications Minister Senator Stephen Conroy has warned mining magnate Gina Rinehart not to "trash" Fairfax.
Last week, as Fairfax shares hit a historic low, Ms Rinehart raised her stake from 13% to 18.7% - making her the largest single shareholder.
The Fairfax-owned AFR has reported that Fairfax chairman Roger Corbett has offered Ms Rinehart two seats on the board - but only if she pledges to sign the company's charter of editorial independence.
Ms Rinehart has asked for three seats, and a say in editorial matters - including the right to hire and fire editors say Fairfax reporters.
This morning, Senator Conroy told ABC, "She's entitled to representation, but what she's not entitled to do is trash the brand for all the other shareholders."
He added, "She should be aware that that charter is something that the readership of the Age, the Sydney Morning Herald, believe in, and have supported over many, many years.
"And if she was to directly interfere and breach that charter it would actually lead to a crisis of confidence among the readership, and if the readership deserted, then the share price for every shareholder would decline."
Ms Rinehart was entitled to try and turn Fairfax into "the mining gazette", Senator Conroy said. "But the other 80% of shareholders, who will see the share price fall, need to know that that's what's behind it."
The senator offered no detail on the repercussions of Ms Rinehart ignoring his warning, however.
He said Labor would not support legislation proposed by the Greens to force Ms Rinehart to sign the editorial independence charter.
Acting Prime Minister and Treasurer Wayne Swan also waded into the debate this afternoon, saying Ms Rinehart's push for editorial control was a threat to democracy.
Yesterday, Fairfax announced a plan to lay-off 1900 staff - or about 20% of its workforce - over three years.
It also raised $A160 million by selling down its stake in Trade Me, from 66% to 51%, and announced plans to move The Age and the Herald to tabloid format in print, and erect paywalls around their online content.
Ms Rinehart (58), the daughter and heiress of Hancock Prospecting founder Lang Hancock, is the world's richest woman, according to BRW, with a fortune estimated at $A29 billion.
Fairfax shares [ASX:FXJ], which rose 5c or 7.1% yesterday to 65c, fell back to 61c in early afternoon trading.
Trade Me shares [NZX:TME], which spiked 4.9% yesterday, were up 0.8% to $3.79 in late trading.