MinRes in a game of cat and mouse; Scali customers all at sea

Mineral Resources chief Chris Ellison is due to step down within 18 months. Picture: Colin Murty

Troubled miner Mineral Resources announced on Tuesday that its company secretary, Jenna Mazza, had been appointed specialist legal counsel to the management board, reporting specifically to its ethics and governance committee.

Expect more news of this kind as firestorms of scandal keep shooting embers at the business. MinRes has already lost its CEO Chris Ellison. (He is due to step down in the next 12-18 months.) Roughly $1bn has been ripped from its market cap, and board chair James McClements appears to also be heading the way of the dodo.

Prior to her appointment as company secretary, Mazza was the general manager of the corporate legal division at MinRes. She held that position until January, including while one of her colleagues was allowed to resign rather than face termination over a spate of harassment complaints. These allegations were raised by several women.

We’re not suggesting Mazza had anything to do with the staggeringly lopsided and incompetent investigative process that followed, but she held seniority, and onwards she now climbs to advise MinRes directors on their ethical and governance decision-making. Make of it what you will.

Mineral Resources has appointed Jenna Mazza specialist legal counsel to the management board.

What we can reveal, however, is that the Legal Practice Board of Western Australia has begun an investigation into MinRes and the conduct of its most senior lawyers over the handling of this matter. Compulsion notices have been issued to the company and, from what we hear, the business hasn’t been particularly co-operative.

The legal board’s interest here isn’t at all surprising. Almost nothing about the investigation was handled correctly. The women were instructed to work from home while the man in question – accused of serious misconduct – was permitted to work out of head office. An employee of significant seniority, he allegedly continued working on unrelated sexual misconduct matters within the business.

One investigator later conceded that the behaviour uncovered was “far worse” than expected. Verbal apologies were given to the women who lodged the complaints, but that was after they discovered the fellow wasn’t terminated at all but given a pathway to resign – without any loss of entitlements – once the allegations were delivered to him on a letterhead.

Julie Bishop. Picture: Josh Woning

Ellison’s token blandishments about MinRes – his insistence that the company was a bastion of “safe and ethical behaviour” in the workplace – were always treated as a joke internally, as were his promises to create a “safer work environment” for women. Except for the celebrity “ambassadors” – looking at you, Julie Bishop – who carried water for this phony, no one took these assertions seriously.

Weeks have passed since the LPBWA served its notices on MinRes but, as of Monday, its people are yet to receive the documentation they’ve been seeking. MinRes said the company has been given until December to respond.

“MinRes and its internal legal practitioners will assist the LPB with their inquiries,” a company spokesman said, “noting that there must be a proper legal basis for the disclosure of personal information about a former employee to the LPB”.

Proper legal basis, eh? MinRes is sitting on compulsion notices served up over its piss-weak handling of a harassment investigation. We’d argue that it doesn’t get much worse for brand and reputation than that but, then again, the founding CEO has basically just been sacked – and fined $8.8m – for using company resources to obtain a personal benefit.

Any other listed company would rush to appoint an external firm to audit the available documents and unconditionally co-operate. The job of complying with the orders wouldn’t be left with the very people whose actions are in the frame over this breakdown of process.

But that’s MinRes. We’d call them cowboys, but even cowboys have a code. Its leadership can’t hear the alarm bells going off any more. Too many are ringing all at once. YB

Garbo king unwinds

Spotted! Billionaire garbo king Ian Malouf unwinding with an alfresco beer at The Royal George in Sydney on Tuesday morning.

Peter Wilding and Ian Malouf.

Our spy noticed Malouf tending to a schooner with the CEO of his family office, Peter Wilding, the pair apparently killing time before a lunch appointment at Jimmy’s Falafel, or so Malouf later told us. YB

Furniture delays

Pity the poor customers waiting on furniture from Nick Scali, as the retailer madly scrambles to cover the fallout from the fact that its main shipping company has gone bust.

The furniture seller has had 240 or so containers full of furniture sitting on Australian wharves since early October, holding off increasingly angry customers with a procession of excuses for delayed deliveries.

What chief executive Anthony Scali hasn’t been telling customers (or shareholders) is that shipping company Lion Global Forwarding has gone bust, and the company is now on the hook for the failed company’s own bills – at least if the retailer wants its furniture delivered.

Readers might remember that Nick Scali took Lion to court in late October, arguing for the release of furniture held up on Australian docks by Lion’s failure to pay its own bills.

Sadly for Nick Scali, Justice Angus Stewart ordered the retailer to pony up the $US1.3m ($2m) it still owed to Lion, and come back if the freight company still failed to deliver.

It’s not yet clear what Lion did with the money, but the Queensland freight company called in SV Partners’ Matthew Bookless as its liquidator last week. Nick Scali has spent the past 10 days making daily appearances in front of the court, trying to shake loose the 240 or so containers from Australian wharves so they can get on with delivering long-delayed leather couches to angry customers.

Matthew Bookless of SV Partners. Picture: John Gass

But in return the company has been forced to promise the court it will cover Lion’s outstanding bills with 17 shipping lines holding their goods – including outstanding freight costs and wharf storage charges – to get couches and beds finally heading towards people’s houses.

How much will that cost? That’s not yet clear either. But wharf charges can be as much as $150 per day, per container. Shipping costs aren’t cheap either, and we’re told the total bill is likely to be in the millions.

And that may not be the end of it. We’re also hearing Lion owes millions to trucking companies and has racked up big debts across the globe.

Let’s be clear, Nick Scali’s only fault is putting its faith in a freight company that went bust because Lion owner Theo Karabetsos made a (very) bad bet on the direction of shipping costs. It’s now hired a new freight company, Northline, to handle future orders.

Perhaps the cost to fix the mess isn’t big enough to require an ASX disclosure. But as recently as Tuesday Nick Scali was still pushing back deliveries – planned for next week, now delayed until December – without saying why.

Surely a bit of honesty would have been a far better policy? NE