Fairfax grants board seat to Rinehart ally

Jack Cowin, of Hungry Jack's fame, gets a Fairfax board seat
Jack Cowin, of Hungry Jack's fame, gets a Fairfax board seat

Fairfax Media has given in to pressure from its biggest shareholder Gina Rinehart and granted a board seat to a friend of the mining magnate, Jack Cowin, of Hungry Jack's fame.

Mr Cowin joins the board immediately as an independent director, the company said in a statement.

“We are very pleased that Mr Cowin, an experienced media investor and director, has accepted our invitation to join the Board," said chairman Roger Corbett in the statement.

The recent war of words between Mrs Rinehart and the board over how many seats - if any - she should be granted for her stake may not, however, be over.

“Our discussions with Mr Cowin over recent months have made it clear that he has considerable value to add to the company," Mr Corbett said. "Neither Mr Cowin or Fairfax Media consider his appointment as being indicative or connected to the potential outcomes of the company’s inconclusive discussions with Hancock Prospecting Pty Ltd."

Mrs Rinehart owns 14.99 per cent of Fairfax through her Hancock Prospecting company.

Mr Cowin agreed to the same conditions are other board members, including editorial independence, the company said.

The issue of editorial independence was central to the decision of the Fairfax board not to offer Mrs Rinehart a seat. She has demanded as many as three seats and at the end of June gave Mr Corbett an ultimatum to lift the company's share price by 50 per cent to 87 cents by the company's annual general meeting later this year.

One media analyst said the ultimate significance of the board appointment is not yet clear.

“We can really only take the statement at face value that he has come in as an independent director,” said Mr Fraser McLeish, an analyst with RBS equities media. 

Shares of Fairfax Media, publisher of this website, were up as much as 1 cent, or 1.8 per cent, to 57.5 cents in early trading. 

Old Friend

Mr Cowin is an old friend of Mrs Rinehart's and her father, Lang Hancock, before her. The Canadian-born businessman has repeatedly advised her to invest in media, and was at Mrs Rinehart's side when she first visited the offices of Fairfax Media in Sydney earlier this year.

Mr Cowin has also previously condemned the company's decision not to appoint Mrs Rinehart to the board citing her extensive business success, according to reports. However, he added that Mrs Rinehart should not have direct contact with journalists.

Morningstar senior media analyst Tim Montague-Jones expressed surprise that a board member of Ten Network could take a seat on Fairfax's board, given the potential media concentration issues.

“(Mr Cowin) is also a board member of Channel Ten and I’m surprised he doesn’t have to relinquish that board seat to go on to Fairfax,” said Mr Montague-Jones.

“I’m sure Gina want to get on the board too," he said. "It’s pretty obvious she wants a board seat.”

“It will be interesting to see what happens next,” said Mr Jones. “The plot thickens.”

Mr Corbett, though, said the company believes Mr Cowin - the founder of the successful Hungry Jack's burger chain - will bring useful skills to the Fairfax board.

"Jack is one of Australia’s most respected and experienced entrepreneurs and directors. He has been a long-term investor in the media and we welcome his great media experience, independence of thought and insights,” Mr Corbett said.

BRW's latest rich list credits Mr Cowin with a fortune of $610 million, placing him 63rd in Australia. While a tidy sum, Mr Cowin's wealth is a fraction of the $29.17 billion BRW estimates Mrs Rinehart is worth, making her the richest woman in the world.

Mr Cowin has been a director at Ten since 1998, and is a director of the Sydney Olympic Park Authority and Chandler McLeod Ltd and is a director and major shareholder of Bridge Climb, the statement noted.

With Kirsty Simpson, BusinessDay

This story Fairfax grants board seat to Rinehart ally first appeared on The Sydney Morning Herald.