Mineral Resources and founder Chris Ellison hit with class action

Shareholders have hit the miner and its managing director Chris Ellison with a class action that will examine his tax evasion and how share prices were impacted by alleged poor governance.

Mineral Resources boss Chris Ellison is facing a class action lawsuit from investors.

Mining heavyweight Mineral Resources and its co-founder and managing director Chris Ellison have been slapped with a class action – the latest issue following his involvement in tax evasion and other scandals.

Securities class action law firm Phi Finney McDonald filed the claim in the Supreme Court of Victoria on behalf of all investors who acquired an interest in Mineral Resources shares or equity swaps in the period from March 31, 2019 to November 14, 2024.

The claim alleges that Mineral Resources engaged in misleading conduct and failed to disclose material information in relation to its business practices, standards of corporate governance, and the scope and nature of transactions with related parties, including Mr Ellison.

It alleges the Mineral Resources share price was artificially inflated by the company’s misconduct and that investors suffered loss and damage as a result.

The class action also alleges that some investors would not have purchased Mineral Resources shares had the alleged wrongdoing not occurred.

The period covered by the class action includes part of 2019 when Mineral Resources has admitted a number of company emails relating to British Virgin Islands entity Far East Equipment Holdings Limited were deleted. Mr Ellison had an interest in Far East Equipment Holdings and later admitted his involvement in tax evasion.

Mineral Resources’ market valuation has been slashed by more than two thirds from a year ago, as it deals with the fallout from the tax rorts and other scandals, including misuse of company resources and transactions involving members of Mr Ellison’s family.

Phi Finney McDonald senior associate Annabelle Nilsson said the class action centred on disclosure obligations and the importance of proper corporate governance.

“The claim alleges that Mineral Resources breached its disclosure obligations in relation to serious governance failures that directly impacted shareholder value, including the use of company money for personal benefit,” she said.

“Mineral Resources’ current predicament is an example of the importance of strong and effective corporate governance, and the harm that can result in its absence.”

Phi Finney McDonald launched a class actions against logistics software group WiseTech last year and has been involved in class actions against BHP, ANZ, Westpac, Freedom Foods and others.

Mineral Resources said the class action related to matters that had been “comprehensively addressed” by the company in the market since October 2024.

Those market disclosures were made after media reporting shed light on the tax evasion and other scandals.

The company said it “intended to strongly defend the class action” and would update the market in accordance with its continuous disclosure obligations.

In November last year, Mineral Resources said its board had concluded that emails were deleted in 2019 in an attempt to avoid information regarding Far East Equipment Holdings becoming public.

“These actions were taken at around the time that Mr Ellison commenced the process of self-disclosing to the ATO (Australian Tax Office), and before the ultimate voluntary disclosure and settlement with the ATO,” the company said.

In the same statement to the ASX, Mr Ellison said: “I am deeply sorry for the events that have occurred and the impact they have had on MinRes’ reputation. I apologise to the rest of the board and to our people, who expect and deserve better from me. I acknowledge that I made mistakes, some of which were driven by my wish to keep private certain events that cause me great personal embarrassment.”

Perth-headquartered Mineral Resources and Mr Ellison remain under investigation by the Australian Securities and Investments Commission.

The ASX has also grilled the embattled company about whether the market was kept properly informed ahead of the miner’s first-half results, which revealed a massive loss.

MinRes’s share price tumbled more than 20 per cent on February 19, when it disclosed a net loss of $807m compared to net profit after tax of $530m for the same period a year earlier.

The miner at the same time made the stunning disclosure it would need to resurface with asphalt the 150 kilometre-long haul road essential to its iron ore operations and carry out other repairs at a cost of more than $200m.

The ASX quizzed MinRes about the 9 per cent fall in first half revenue, the 55 plunge in EBITDA and the 200 per cent decline in underlying NPAT.

The result included a $352m post-tax impairment on the mothballed Ball Hill lithium mine and a $232m foreign exchange hit.

Mr Ellison has admitted his involvement in a tax evasion scheme that involved buying and selling mining machinery through Far East Equipment Holdings.

He reached a settlement with the tax office that involved paying outstanding tax, penalties and ­interest.

Mr Ellison recently paid a $3.8m penalty to MinRes over some of the scandals and misuse of company resources, including for work on his luxury yacht Anya, which was put up for sale in February.

He is due to depart the company he co-founded, sometime before the end of April next year.

Mineral Resources shares closed on Tuesday at $23.78, down nearly 67 per cent on a year ago.

Originally published as Mineral Resources and founder Chris Ellison hit with class action