‘I can’t express how much I hate what I have done’: Mining billionaire Chris Ellison fronts shareholders

Embattled mining billionaire Chris Ellison has expressed deep regret over the tax scandal that has cost him his role at the helm of the company he founded, labelling his mistakes “a dark cloud” in his life while fronting hundreds of shareholders.

In a brief statement at the miner’s annual general meeting in Perth on Thursday, a downcast Ellison told shareholders he made an “error of judgment” in failing to report his personal tax and expressed regret for the impact his decision had on the business and its staff.

Chris Ellison addresses the AGM. Credit: Courtney McAllister

He assured investors he had repaid the funds he owed to the company and vowed to support the board as it embarks on a global search for his replacement within the next 18 months.

“I can’t express how much I hate what I have done, this is a dark cloud in my life that I will live with forever,” Ellison said, before pausing to compose himself.

“For 32 years, my focus has been on building a great Australian company.

“Looking back, I accept things could have and should have been done differently around corporate governance, but those measures are now in place.

“I’ve made some mistakes along the way; I own those mistakes and take full responsibility.

“I’ve built a great company, delivered extremely good returns for MinRes shareholders, employed thousands of people, created a great working environment for my employees – and delivered huge benefits to Australia.

I can’t express how much I hate what I have done, this is a dark cloud over my life

Chris Ellison

“We have a very strong board that will ensure the ethics and governance processes are very strong going forward. I support the board and will continue to manage this great business with all my capability and energy through this transition phase.”

Mineral Resources chair James McClements opened the meeting by addressing the probe which uncovered Ellison had used company resources for personal gain, with the billionaire having been involved in an offshore equipment markup scheme and tasked staff with working on his own properties, his boat and his personal finances.

“From time to time, Chris lacked judgment and used company resources for personal matters,” he said.

“The board accepts that Chris’ intention was never to cause detriment to the company or its shareholders and there were processes in place for amounts to be repaid to the company in a timely manner.

“There have also been occasions, including in respect of historical dealings with Far East Equipment Holdings Limited and the subsequent personal tax implications, where Chris lacked the judgment and integrity we would expect of our managing director.”

McClements, who will follow Ellison by departing after 10 years with the company, insisted the related-party deals it had uncovered would remain the subject of rigorous independent testing.

The Osborne Park-headquartered diversified mining services company has been grappling with a plunging share price for four weeks amid shock revelations by the Australian Financial Review that Ellison and four other executives had profited to the tune of millions of dollars in an offshore scheme that ran for a decade.

Mineral Resources was founded by Chris Ellison, who remains its managing director. He says he will leave the company in the next 18 months.Credit: Trevor Collens

Ellison, who remains the largest shareholder with an 11.5 per cent stake in the $7 billion miner he founded 32 years ago, will fork out $18.4m in penalties over the scheme before he departs.

The billionaire had maintained a low profile since the scandal was thrust into the public arena until the meeting, entering the company’s eponymous sporting centre among a convoy of private vehicles with tinted windows to avoid the waiting press pack.

Hundreds of shareholders flooded the two-hour meeting, where the board was grilled about its governance failures, its debt-laden balance sheet and a succession plan that has divided investors.

The board defended its decision not to disclose the probe it launched into the offshore scheme two years before it was outed by the media, insisting it wanted all the facts before addressing investors.

McClements also stood by the board’s decision to allow Ellison to remain at the helm for up to 18 months despite the damning findings, telling shareholders a sudden departure was not in the best interests of the company.

While some were eager to see Ellison moved on promptly, others touted his value and pleaded with the board to consider giving him a second chance.

The board has not explicitly ruled out the possibility of the billionaire remaining with the company in some capacity, even as the corporate regulator launches its own investigation.

The board faced backlash over executive pay and was hit with a first strike, with more than two-thirds of those attending the AGM voting against the board’s remuneration report.

Mineral Resources Chair James McClements. Credit: Courtney McAllister

McClements claimed the past 12 months had been the most challenging time in the company’s history, with the tax scandal, plunging lithium prices, sweeping cost cuts and halted operations at its Bald Hill mine happening just months after the highly-anticipated opening of its $3 billion Onslow iron ore project.

The meeting comes several weeks after Gina Rinehart’s mining empire Hancock Prospecting announced it had acquired MinRes’ Lockyer gas project and an interest in its other gas projects in a deal worth up to $1.1 billion.

The bombshell external probe concluded Ellison used company resources for personal gain, from rent paid to entities in which he had an interest, staff directed to work on his personal property and relief afforded to entities tied to his daughter Kristy-Lee Craker.

However, the board insisted it was satisfied the use of the company assets had not been financially detrimental.

Emails related to East Far Equipment Holdings — the company at the centre of the scheme — had been wiped in 2019.

Two further payments were made by MinRes after the $7 billion diversified mining services company’s initial public offering in 2006 to extinguish its liability, but the revenue generated by the entities went undisclosed until Ellison’s voluntary disclosure in 2021.

The Perth-based billionaire settled his debts with the ATO in May 2023, something the board remained in the dark about until six months later.

The company’s share price has plunged over the past four weeks, wiping more than $2 billion from the value of the $6.8 billion business.

Shares were down 2.45 per cent after the meeting to $33.86.

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