Watchdog keen on MinRes internal inquiry into confessed tax cheat Chris Ellison

ASIC is interested in the outcome of an internal inquiry launched by the MinRes board into Chris Ellison’s admission that he once cheated on his personal tax obligations.

Mineral Resources managing director Chris Ellison is under scrutiny over his tax declarations. Picture: Colin Murty

Australia’s corporate watchdog is on the trail of Mineral Resources managing director Chris Ellison in the wake of his admissions about an elaborate tax evasion scheme involving companies registered in the British Virgin ­Islands.

The Australian Securities and Investments Commission has details of the conduct of Mr Ellison and other key executives involved in the formation of MinRes and allegations the tax scheme reduced profits to the detriment of shareholders in the late 2000s.

It is understood ASIC is taking a keen interest in an internal inquiry launched by the MinRes board and that the watchdog will engage with the company as part of the fallout from Mr Ellison’s admission that he once cheated on his personal tax obligations.

The MinRes share price fell another 4.2 per cent on Tuesday after taking a massive hit to start the week.

ASIC previously investigated MinRes in 2018 in relation to a suspected disclosure of non-public information at an investor briefing. The investigations team opted not to take enforcement action in that case.

MinRes has been in crisis meetings with investors and other stakeholders since the weekend’s shock revelations around its governance and the conduct of Mr Ellison.

There is speculation MinRes could face a class-action lawsuit, with a cloud now hanging over the future of its founder.

Mr Ellison is the company’s biggest shareholder with about 15 per cent of the stock and has been busy in recent months trying to calm market jitters about the strength of the company’s balance sheet.

The MinRes share price hit a multi-year low of $29.51 in August and closed at $37.87 on Tuesday after steep falls this week sparked by the tax scandal.

Although Mr Ellison has cut a deal with the Australian Taxation Office regarding his personal affairs, he now faces allegations the elaborate tax evasion scheme involving offshore companies affected MinRes shareholders in the years after it was floated in 2006.

Investors are anxious to see what, if any, sanctions Mr Ellison faces in the wake of a company-ordered investigation led by an outside law firm.

Mineral Resources’ Mt Marion lithium mine southwest of Kalgoorlie in Western Australia.

Former MinRes chairman Peter Wade is also under scrutiny, with allegations he was involved in the tax scheme but didn’t raise the dealings with offshore companies while on the company’s audit committee.

Mr Ellison, Mr Wade and other members of inaugural executive team at MinRes are alleged to have used shareholder funds in purchases of mining equipment by an offshore company before selling the equipment back to MinRes at a higher price.

The Australian Securities & Investment Commission declined to comment when asked if it had launched an investigation.

MinRes refused to answer questions about whether its inquiry would look at any deals where funds were transferred to offshore companies linked to Mr Ellison after MinRes became a public company.

Originally published as Watchdog keen on MinRes internal inquiry into confessed tax cheat Chris Ellison