KEY POINTS
- HESTA places Mineral Resources on watchlist over governance concerns.
- Billionaire founder Chris Ellison to exit within 18 months amid allegations.
- HESTA may escalate to shareholder resolutions or divestment if issues persist.
Australian superannuation fund HESTA has placed mining giant Mineral Resources (MinRes) on its watchlist, citing dissatisfaction with the company’s response to serious governance issues involving its founder, Chris Ellison.
The fund’s decision follows an internal probe revealing allegations of tax evasion and misuse of company resources by Ellison, who is set to leave the company within the next 18 months.
In a statement, HESTA cast doubt on the company’s succession timeline stating it does not demonstrate a satisfactory account of the governance breaches. As noted by HESTA, these problems point at a more pervasive lack of high ethical standards among MinRes senior management and board.
Enhanced monitoring and potential for escalation
HESTA, which holds a 0.83 percent stake in MinRes, has indicated it will intensify monitoring and engage directly with the company.
Should governance practices not improve, HESTA’s escalation framework may involve voting against board directors, supporting shareholder resolutions, or even divesting.
According to Mining.com, these steps, the fund noted, are part of its commitment to safeguarding the financial interests of its members.
HESTA clarified that placing a company on its watchlist is a step toward demanding accountability and addressing persistent governance risks. “Alongside MinRes, Woodside and Santos are also on our watchlist,” HESTA confirmed.
MinRes’s path forward amid leadership transition
The move arises at a time when MinRes is going through the Ralph Ellison transition in which the company faces further pressure from shareholders and regulators.
MinRes made a strategic change of its direction late last year when it pulled out from the planned investment with a Chinese partner Albemarle.
By being on HESTA’s watchlist, it gives a strong reminder of what shareholders expect from organisations in the manner they conduct their affairs and especially within high-risk sectors such precious and other mineral mining industries.
The measures that are taken to manage the fund are to make sure that the companies being invested stick to the principles of ethical leadership and high transparency of their work, which is still basically significant to HESTA.
