Billionaire mining boss Chris Ellison will leave Mineral Resources as part of an “orderly transition” within 18 months after the company’s board found the chief executive had at times used company resources for his personal benefit.
MinRes said in a statement it had also fined Ellison $8.8m to reflect the “significance of corporate governance and reputational issues to the company”. The founding chief executive also faces a further $9.6m in lost remuneration.
The mining and services company ordered an investigation into its founder over various allegations including Ellison’s decision not to disclose revenue generated by overseas entities to tax authorities before the company was listed; an issue for which the mining magnate has apologised.
The company’s chair, James McClements, will also step down at or before next year’s annual general meeting, the company said.
As part of the investigation, a range of issues and shortcomings were identified, MinRes said on Monday.
“With the interests of shareholders absolutely front and centre, the board has determined there needs to be an orderly leadership transition, significant strengthening of governance protocols, and a financial penalty imposed on Mr Ellison,” McClements said.
The company said that Ellison did not disclose his private tax settlement with the ATO to MinRes in a timely manner.
Separately, MinRes found that the chief executive, on occasion, used company resources for his personal benefit.
This included: directing company employees to work on his boat and properties, directing a company employee to manage his personal finances; and using the company to procure goods and services for his private use.
“While he has cooperated with the current investigation, over the lifespan of the matters being investigated, on some matters, Mr Ellison has failed to be as forthcoming with the board as he should have been,” McClements said.
“There can be no doubt that the actions, decisions and behaviours of Mr Ellison have been profoundly disappointing and require sanction and penalty.”
The board said that, taking into account the broad allegations, “Ellison has not acted with integrity” which the company said was “at the core of the company’s values”.
The report’s release triggered an immediate 8% slide in the MinRes share price early on Monday, adding to a hugely volatile period for the company that boasts a large portfolio of iron ore and lithium assets, as well as mining services contracts.
Ellison said in a statement he accepted the board’s decision.
“I am deeply sorry for the events that have occurred and the impact they have had on MinRes’ reputation,” Ellison said.
“I apologise to the rest of the board and to our people, who expect and deserve better from me. I acknowledge that I made mistakes, some of which were driven by my wish to keep private certain events that cause me great personal embarrassment.”
Ellison is a prominent businessman who set a property price record in 2009 after paying $57.5m for a Perth home on the Swan River, which was at the time the most expensive house sale ever recorded in Australia.
He recently made headlines for his strident criticism of flexible work arrangements that extended to wanting to keep workers from stepping out of the office during the day.
The initial revelations, first disclosed by the Australian Financial Review, found that the MinRes founder and his business partners operated overseas entities to purchase mining equipment to import and sell in Australia prior to the company’s listing in 2006.
Some of that machinery was sold to MinRes. Ellison has agreed to pay the money back, according to Monday’s statement.
Ellison has conceded that revenue generated by the overseas entities was not disclosed to tax authorities.
The company said on Monday that Ellison went on to make a voluntary disclosure to the ATO of that income, which resulted in him paying $3.94m in unpaid taxes in May 2023.
“Mr Ellison did not disclose to the company the matter of his private tax settlement until November 2023,” MinRes said.
