ASIC launches formal investigation into Mineral Resources and founder Chris Ellison

Australia’s corporate watchdog has ramped up its investigation into Mineral Resources managing director Chris Ellison over his involvement in an elaborate tax evasion scheme.

Mineral Resources managing director Chris Ellison

Australia’s corporate watchdog has ramped up its investigation into Mineral Resources managing director Chris Ellison over his involvement in an elaborate tax evasion scheme and other conduct condemned by the board.

Australia Securities & Investments Commission deputy chairwoman Sarah Court said it had launched a formal investigation into the company and the actions of its co-founder.

Ms Court revealed the investigation during a Senate estimates hearing on Thursday, and confirmed that ASIC had contacted the Australian Taxation Office as part of the probe.

Mr Ellison has admitted his involvement in a tax evasion scheme that involved buying and selling mining machinery through companies registered in the British Virgin Islands.

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

Documents published in the media show he sought undertakings from the ATO that it would not pass details of tax evasion to ASIC or the federal police.

ASIC’s confirmation of a formal investigation comes a fortnight after Ms Court said the watchdog was making preliminary inquiries.

Greens senator Barbara Pocock has used this week’s estimate hearings to grill the Future Fund, tax officials and ASIC about the MinRes scandal.

Ms Court said ASIC had engaged with the ATO and might use its evidence-gathering powers as part of the investigation.

“We will look at the information that we obtain, and then we will make an assessment as to whether or not we think there’s been any contraventions of the laws that ASIC administers,” she said.

Ms Court indicated the formal investigation started at least a week ago. MinRes declined to comment on Thursday.

Australian Council of Superannuation Investors has led calls for the MinRes board to engage with ASIC on the findings of a company-commissioned investigation by law firm Herbert Smith Freehills.

Future Fund boss Ralph Arndt told Tuesday’s Senate estimates hearing that the fund wanted more information from the MinRes board on Mr Ellison’s involvement in tax evasion and other dubious conduct exposed by whistleblowers and the Freehills investigation.

Mr Arndt said the issues around MinRes were serious in comments that indicated the Future Fund was reviewing its $88m investment in the mining services provider cum iron ore and lithium producer.

The MinRes board said on Monday that Mr Ellison would remain managing director pending an orderly leadership transition in the next 12-18 months.

However, the board is under pressure over its governance standards after acknowledging the mining billionaire had at times failed to act with integrity and been involved in deals that saw financial benefits flow from MinRes to related parties, including his daughter.

The board also found Mr Ellison ordered company employees to work on his boat and properties and manage his personal finances.

On the tax evasion scheme, the board pointed to an attempted cover-up of dealings with Far East Equipment Holdings Limited (FEEHL), a British Virgin Islands-registered company linked to Mr Ellison.

“It has recently come to light that a number of company emails relating to FEEHL were deleted in 2019. The board has concluded that this was an attempt to avoid information regarding FEEHL becoming public,” it told the ASX.

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