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Highlights
- Chris Ellison, founder of Mineral Resources, will pay an AU$8.8 million penalty and step down as managing director within 18 months over undeclared payments.
- The Australian Taxation Office has settled with Ellison, avoiding further investigations, though Australia's corporate watchdog has initiated inquiries.
- Mineral Resources' shares jumped 16% after announcing a potential AU$1.1 billion deal to sell oil and gas permits to Hancock Prospecting.
Mineral Resources Ltd. (ASX:MIN) has announced that its influential founder, Chris Ellison, will be fined AU$8.8 million and will step down as managing director within the next 18 months. The decision comes after the Australian mining company launched an internal investigation into undisclosed payments made to companies Ellison owns. Ellison, who remains a significant shareholder in Mineral Resources, was found to have acted contrary to the company's core values of integrity, according to a company statement released following the probe. He will stay in his role until a suitable successor is appointed.
The internal review revealed that the undeclared payments date back to before Mineral Resources' 2006 stock market listing. The payments originated from overseas entities run by Ellison and his business associates, which were involved in selling mining equipment and parts. The income from these supply contracts was not reported to the Australian Taxation Office (ATO) at the time.
Australia’s corporate regulator has since launched preliminary inquiries into the allegations. In an October 21 statement, Ellison admitted, “Regrettably, revenue generated by the overseas entities that we were beneficiaries of was not disclosed to the Australian Taxation Office at that time. This was a poor decision and a serious lapse of judgment.”
Reports in the Australian Financial Review indicate that Ellison has reached a settlement with the ATO to pay the outstanding amount. As part of this arrangement, the specific figure owed has not been disclosed, and Ellison will not face any further police or regulatory scrutiny.
In related corporate developments, Mineral Resources disclosed on October 31 that it has reached a deal to sell Australian oil and natural gas exploration permits to billionaire Gina Rinehart’s Hancock Prospecting Ltd. This agreement could be worth up to AU$1.1 billion. The market responded positively to the news, with Mineral Resources' stock soaring as much as 16% following the announcement.
Chris Ellison, known for his bold and sometimes controversial statements, has previously attracted media attention for his unconventional management practices. Earlier this year, he made waves by suggesting that employees at the company’s offices should be prevented from leaving the building to buy coffee, a proposal that sparked wide discussion in the Australian business community.
