KEY POINTS
- ASIC investigates Chris Ellison and Mineral Resources for undeclared payments.
- Mineral Resources shares drop over 20%, wiping A$2 billion in market value.
- Ellison voluntarily disclosed the payments to the Australian Taxation Office.
Australia’s corporate watchdog, the Australian Securities and Investments Commission (ASIC), is investigating Mineral Resources Ltd. and its founder, Chris Ellison, after he admitted to making undeclared payments that avoided taxes.
As reported by Mining, this investigation follows revelations that Ellison did not disclose income from overseas entities before his company was listed in 2006.
Allegations and ASIC inquiries
The ASIC probe will focus on whether Ellison and other directors of Mineral Resources breached their fiduciary duties. The watchdog is also demanding access to a report commissioned by the company to investigate the allegations further. Ellison, who remains the managing director and a significant shareholder of Mineral Resources, acknowledged that the payments were a “poor decision” made before the company was publicly listed.
According to Ellison, the undeclared income stemmed from business ventures outside Australia, where he and his partners sold mining equipment. He failed to declare income from these contracts but has since voluntarily disclosed the matter to the Australian Taxation Office, settling all outstanding taxes, penalties, and interest.
Impact on market value
News of the investigation, which began circulating earlier this week, has significantly impacted Mineral Resources’ market value. Shares in the company have fallen by over 20 percent since the initial report by the Australian Financial Review, wiping nearly A$2 billion from its value. Despite this, the company’s board maintains its confidence in Ellison and has promised to update the market after completing its internal review of the situation.
This is not the first time Ellison has made headlines. Earlier this year, he drew media attention when he attempted to prevent employees at the company’s headquarters from leaving the building to purchase coffee during work hours, further demonstrating his unconventional management style.
Ongoing concerns
The repercussions of the undeclared payments extend beyond Ellison’s reputation. The company, which operates in sectors such as iron ore and lithium production, is a major player in Australia’s resource industry. Any misconduct at the top could have far-reaching implications, particularly given the company’s reliance on investor confidence.
Ellison’s transparency in dealing with the matter may work in his favor, but the investigation raises broader concerns about corporate governance within Australia’s mining industry. As one of the country’s most high-profile business figures, Ellison’s actions are under scrutiny, and ASIC’s inquiry may set a precedent for how undeclared payments and corporate accountability are handled in the future.
Future developments
For now, both Mineral Resources and its CEO are awaiting the findings of ASIC’s investigation. Ellison, in his statement earlier this week, expressed regret for his actions but emphasized that the payments were made well before the company’s public listing, attempting to distance the company from any wrongdoing.
As the corporate watchdog continues its inquiries, market analysts will be closely watching both the company’s internal review and ASIC’s final report. For Mineral Resources, maintaining investor confidence will be crucial as it navigates the fallout from the probe.
