Fortescue Metals Group Ltd chief executive Andrew Forrest, who has built a $4 billion fortune developing iron ore deposits in the Pilbara, has gifted shares and options worth $80 million to his charity, The Australian Children's Trust.
Fortescue Metals Group Ltd chief executive Andrew Forrest, who has built a $4 billion fortune developing iron ore deposits in the Pilbara, has gifted shares and options worth $80 million to his charity, The Australian Children's Trust.
Mr Forrest today revealed that he had gifted one million Fortescue Metals Group shares, or one per cent of his holding in the company, plus 115 million Posiedon Nickel Ltd options.
Mr Forrest, who is Poseidon chairman, retains a holding of 5 million shares in the nickel developer.
The Australian Children's Trust will own about 0.4 per cent of Fortescue's issued capital and, on the assumption that all Poseidon options are exercised, the Trust would have a 39 per cent stake in Poseidon..
Mr Forrest also revealed today he had gifted 520,000 FMG shares to unnamed family members.Those shares are today worth $22.2 million.
Mr Forrest, who has already invested about $10 million in the trust, said he had gifted the shares to his charity to help it meet its long-term funding needs.
The charity helps underprivileged children from indigenous and non-indigenous backgrounds and has been operating for nearly 10 years through the sole financial support of the Forrest family.
"Essentially, all charities have an issue with their longevity and their security and even if they are cashed up like the Australian Children's Fund once those funds are dispersed, without capital there is no further ability for the charity to support the causes," Mr Forrest said.
Mr Forrest found himself mired in controversy when he last publically made a sizeable donation to charity.
In 2002, a charity he established called Leaping Joey was entwined in a series of transactions linked to the mining entrepreneur's departure from Anaconda Nickel Ltd, his most significant venture prior to Fortescue.
In a $3.5 million deal, Mr Forrest sold 4.12 million Anaconda shares at 85 cents each to Leaping Joey, then trustee of the Australian Children's Trust, at the same time as donating an additional 2.9 million shares notionally worth $2.4 million.
The $3.5 million used to buy the shares had been donated to Leaping Joey by Anaconda as part of a termination agreement with Mr Forrest.
Mr Forrest claimed at the time that he received no personal benefit from the transaction and described accusations that it was tax-effective for him as hurtful.
He said his recent share transaction to the Trust was done without tax consequences in mind, especially given the transaction was taking place near the beginning of a new financial year.
Mr Forrest said he hoped other business leaders would follow his philanthropic lead.
"I have studied what Melinda and Bill Gates have done. In some small way they hoped their actions would help others. We are following in their foot steps. I would be thrilled to the core if people followed ours."
A copy of an annoucement made by Poseidon this afternoon is pasted below:
Poseidon Nickel welcomes charitable donation of options by
Andrew Forrest to the Australian Children's Trust
Poseidon Nickel Limited welcomes the decision made by its Chairman, Mr Andrew Forrest, to donate his entire options entitlement in the Company together with shares of Fortescue Metals Group to the Australian Children's Trust (Trust), of which he is also Chairman.
Mr Forrest announced his decision after a Board meeting of the Company at which an allocation of 115 million options was ratified, following an earlier agreement by shareholders at a General Meeting in July.
Mr Forrest will remain as Poseidon's Chairman and will continue to be a shareholder in the Company.
At the Board meeting Mr Forrest announced his intention to donate the entire entitlement to options to the Trust. Mr Forrest also confirmed his intent to purchase 5 million shares in the company.
On a fully diluted basis, the Trust will own approximately 39 per cent of the shares in Poseidon.
"I am committed to Poseidon and will remain as Chairman and a long term shareholder in the company to see through the development of the Company's exciting nickel projects," Mr Forrest said.
He said he expected the Trust to retain a long term interest in the Company.
The Chief Executive Officer of Poseidon, Mr. David Singleton, said "Mr Forrest's continuing commitment to the Company through his Chairmanship and personal involvement with the Trust, is greatly appreciated by the Company. We also appreciate the expectation of the Trust to remain a long term stakeholder" Mr Singleton said.
"Mr Forrest's corporate and project development experience will continue to be a major benefit to the Company as we strive to develop our projects. "Like me, I think all shareholders, existing and future staff will appreciate the inclusion of a charitable fund committed to the welfare of disadvantaged Australian children. If ever something was going to motivate us more than we already are, it is this."
The Australian Children's Trust
The Australian Children's Trust has commended Andrew and Nicola Forrest for their extraordinarily generous donation to the Trust of the family's investment in Poseidon Nickel Limited. Trust spokesman, Mr Herb Elliott, said the donation had the potential to propel the Trust into being one of the largest philanthropic charities in Australia.
He expected the Trust would retain a long term interest in Poseidon but said that decision would ultimately be the responsibility of the independent investment committee advising the Trust.
The Trust has been operating for nearly 10 years through the sole financial support of the Forrest family.
