Chris Ellison on leave as MinRes mulls options

The miner is understood to be working on a crisis succession plan involving a new leader and the resignation of some directors, noting its investigation of founder Chris Ellison had evolved in light of new allegations.

Mineral Resources boss Chris Ellison. Picture: Supplied

Mineral Resources board says under fire managing director Chris Ellison remains on leave but is co-operating with an investigation into his tax affairs and other business dealings.

The company is facing multiple investigations and has been in crisis meetings with investors over a series of damning revelations about a tax avoidance scheme involving Mr Ellison and related party transactions.

MinRes is now scrambling to respond to questions from the ASX around Mr Ellison’s conduct, his involvement in a tax evasion scheme and the company’s governance.

It remains unclear if Mr Ellison, one of the company’s founders and its talisman leader, will survive as managing director, but a number of big investors want him to stay.

However, MinRes chairman James McClements said the board needed to “strike the appropriate balance of all factors” amid the crisis engulfing Mr Ellison.

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

It is understood MinRes has started working on a Plan B that would involve installing a new leader and the resignation of some directors.

In a statement issued eight days ago, the board is it had full confidence in Mr Ellison and his leadership despite his involvement in a tax evasion scheme involving companies registered in the British Virgin Islands in the early years of the company.

On Monday, the board said an investigation it commissioned had evolved in light of new allegations that didn’t match the company’s “understanding of the facts”.

Mr Ellison’s future is in the balance amid allegations the scheme continued after MinRes listed on the ASX in 2006. The scandal and any reparations Mr Ellison made to the company were never revealed to shareholders, and first came to light in the media.

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

The Australian Securities and Investments Commission has started an inquiry and, on a separate front, two WA government agencies are investigating animal cruelty claims against MinRes.

Mr Ellison, via his tax advisers, sought to cut a deal with the Australian Tax Office over the tax evasion scheme in late 2019. He pursued an undertaking that the ATO would not alert ASIC or the federal police as part of a settlement.

It is alleged a handful of other executives from the company’s early years, including former chairman Peter Wade, were involved in the scheme, and that a whistleblower alerted independent directors in 2022.

Mr Ellison was overseas on leave when the scandal broke on October 19. The MinRes board said he would return from leave in November.

“The company is committed to a timely process and to reporting to the market as soon as possible, while ensuring that fair and robust governance processes are followed with everyone concerned,” it said in statement to the ASX before the market opened on Monday.

“Mr Ellison is continuing to cooperate with the investigation while taking planned leave, from which he is scheduled to return in November.”

Chairman James McClements said the board’s response was driven by “high governance principles and the best interests of MinRes shareholders, now and in the long term”.

“We are determined to ensure that this is the path for MinRes long into the future and we understand our role as a board is to strike the appropriate balance of all factors so this is delivered for our investors.

“At the same time, it remains focused on generating sustainable value for its shareholders, working in partnership with its clients, customers, people and communities.”

AustralianSuper sold a big chunk of its MinRes stake last week and said it was in talks with the board as part of an assessment of its longer-term position on the register. Industry fund HESTA has also engaged with the board in the wake of the allegations.

Originally published as Chris Ellison on leave as MinRes mulls options