Chris Ellison, the managing director of Mineral Resources, will step down following allegations of tax evasion. The internal investigation, prompted by a Nine Newspapers report, revealed Ellison's failure to disclose an interest in an offshore company from which a Mineral Resources subsidiary purchased mining equipment.
Ellison, who founded the company nearly 20 years ago, will remain in his role for the next 12-18 months while a successor is found. The board has imposed an $8.8 million financial penalty on Ellison and withheld nearly $10 million in planned executive remuneration.
The investigation, conducted by Herbert Smith Freehills, found that Ellison did not disclose his financial interest in a British Virgin Islands (BVI) company involved in transactions with Mineral Resources. Additionally, company funds were used to benefit entities linked to Ellison's daughter without the company's knowledge.
Ellison has apologised for his actions, acknowledging mistakes driven by personal embarrassment. He voluntarily disclosed the income from the BVI company to the Australian Tax Office (ATO) in 2021 and paid nearly $4 million in unpaid taxes in May 2023.
Mineral Resources will establish an independent ethics and governance committee to ensure transparency in future dealings. Chair James McClements will also step down at or before the next annual general meeting, unrelated to the investigation.
Corporate governance experts have criticised the episode, highlighting the company's dependency on Ellison and the lack of a clear successor. The scandal has raised concerns about the broader culture at Mineral Resources and could leave the company vulnerable to takeover.