By Kirsty Simpson
THE gloves have come off in the battle for control of Fairfax Media with its major shareholder, Gina Rinehart, and the company exchanging increasingly personal salvos.
Mrs Rinehart and her company Hancock Prospecting sent two letters to the Fairfax chairman, Roger Corbett, yesterday. The first called on him to resign if he failed to meet a ''performance milestone'' of returning the share price to 87¢ and failed to reverse ''the five-year decline in paid circulation and revenue'' before November's annual meeting.
- Read the HPPL statement
- Read Mrs Rinehart's letter here
- Read Fairfax's response here
- Support for Fairfax charter
- Murdoch's crocodile tears for Fairfax
Fairfax Media, the publisher of the Herald, rejected the ultimatum, calling on her to bid for the company if she wanted control. ''Mrs Rinehart's letter today has once and for all unmasked her motives for her continual attacks on the company and its board,'' a company statement said. Readers would abandon the group's mastheads ''if Mrs Rinehart succeeds in this personal crusade''.
Mrs Rinehart's chief lieutenant in her bid for Fairfax, John Klepec, then fired off another letter. Mr Klepec, who is the chief development officer for Hancock Prospecting, said two board seats out of 12 was not a majority, implying Mrs Rinehart would have limited influence.
Gina Rinehart ... November ultimatum.Credit: Claire Martin
''Mrs Rinehart has repeatedly advised that she would not use the publications to promote her private interests only,'' Mr Klepec said. ''It is … incorrect for Fairfax to … allege that this has been a 'personal crusade'."
In the initial letter Mrs Rinehart rejected the board's assertion that the charter of editorial independence was the key disagreement. ''Where we have differed most profoundly is not over the charter of editorial independence, contrary to much Fairfax reporting, but over how to save a business that is reportedly in danger of dying,'' she said.
The company responded: ''Contrary to Mrs Rinehart's repeated assertions that this isn't about editorial control - it is. It is also about her obtaining control of the company and not paying a premium.''
Mrs Rinehart said Fairfax's performance over the past five years had been ''distressing'' for shareholders. To Mr Corbett she wrote that the milestone share price would represent ''only a 50 per cent loss'' since he became chairman in October 2009.
''And if the five-year decline in paid circulation and in revenue of the Fairfax mastheads do not reverse prior to the 2012 AGM, we ask that you tender your resignation at that meeting.''
Fairfax referred to Mrs Rinehart's record as a media investor at a time when share prices have been savaged by structural change and stalling advertising. It noted that shares in Network Ten had fallen by about the same amount as Fairfax Media and other media companies since Mrs Rinehart had joined Ten's board.
The company underscored the growth in readership across all platforms as it extended its digital reach. Overall readership was at the ''highest levels in the company's history''. On Wednesday the Fairfax board announced it could not give Mrs Rinehart a board seat, citing disagreements over editorial independence.
Mrs Rinehart, who recently lifted her stake in the company to 18.67 per cent, expanded on her concerns that directors did not have enough of their own money at risk in their shareholdings.
And she revealed concerns about the sweeping overhaul of the company announced nearly a fortnight ago, in particular the planned closure of printing plants in Sydney and Melbourne.