Mineral Resources chair James McClements fronts investors amid Chris Ellison crisis

Mineral Resources chief executive Chris Ellison. Picture: Colin Murty

Mineral Resources chairman James McClements is understood to be holding crisis meetings with shareholders across the country’s east coast as the scandal deepens surrounding the company’s billionaire founder Chris Ellison.

DataRoom understands that Mr McClements, also managing partner of Resource Capital Funds, had talks on Monday with institutional investors that hold major positions in Mineral Resources in Melbourne – the city where AustralianSuper is based – while further meetings are scheduled for Tuesday in Sydney.

AustralianSuper remains one of Mineral Resources’ largest shareholders despite selling a minor part of its holding last week, while others, such as L1 Capital, are based in Sydney, along with Magellan’s Airlie Funds Management.

It comes as the largest shareholders at Mineral Resources are so far backing Mr Ellison to remain at the helm of the company as the chairman fronts investors, while the billionaire mining magnate remains on leave in France.

Their support so far is subject to no other adverse findings being brought to light.

Speculation was growing late last week that pressure could be mounting on Mr Ellison to go as the company faces multiple investigations over a series of damning revelations about a tax avoidance scheme involving Mr Ellison and related party transactions.

There had been suggestions that an outsider with a strong industry reputation could be appointed to his role, while directors could step down to be replaced by a highly regarded mining industry expert such as Nev Power, who previously ran Fortescue Metals.

Mr Ellison owns 11.5 per cent of Mineral Resources, but other major institutional investors include State Street, Blackrock, L1 Capital, Australian Super, Vanguard and Magellan’s Airlie Funds Management.

The Future Fund is also listed as an investor, according to Bloomberg.

The Australian reported on Monday that Mr Ellison is co-operating with an investigation into his tax affairs and other business dealings.

Mineral Resources is probing Mr Ellison’s conduct, his involvement in a tax evasion scheme and the company’s governance.

His future is in the balance amid allegations the scheme continued after MinRes listed on the ASX in 2006.

The Mineral Resources-commissioned investigation into Mr Ellison is being run by law firm Herbert Smith Freehills and also involves McGrathNicol.

The Mineral Resources board said its “present intention” was to reveal its conclusions and plan of action to the market next Monday.

DataRoom reported at the weekend that proxy houses had been calling shareholders in Mineral Resources last week to assess whether to recommend that they vote against resolutions at its annual general meeting on November 21, including the re-election of directors.

The share price fell 18 per cent in a week following reports about Mr Ellison’s conduct.

Many consider it lineball as to whether Mineral Resources, which mines iron ore and lithium, has Perth Basin gas assets and provides mining services, needs to replenish its currently stretched balance sheet and raise equity.