ASIC looking into Mineral Resources’ corporate governance crisis as shares keep falling

The corporate regulator is looking into Mineral Resources’ corporate governance crisis, adding to the pressure on the company’s board and chief executive Chris Ellison.

It is understood the Australian Securities and Investments Commission has taken an active interest in the matter, with a preliminary focus on any potential breaches of directors’ duties or MinRes’ disclosure obligations.

The regulator’s intervention comes as investors unnerved by Mr Ellison’s admissions of tax evasion and the uncertainty of a board probe hammer the company’s shares, which have already lost 18 per cent this week.

With the broader market smashed 1.7 per cent lower on Tuesday, MinRes shares gave up another 4.25 per cent on to close at $37.87.

It has now lost more than $1.6 billion in value since Friday as worried investors digest the potential fallout from weekend media revelations that Mr Ellison evaded tax for years on offshore companies he co-owned before MinRes’ joined the ASX in 2006.

Mr Ellison has described the failure to declare the revenue from the companies, which bought and sold mining equipment for on-sale in Australia, as “a poor decision and a serious lapse of judgement.”

Some years later, he self-reported the tax avoidance to the Australian Tax Office and repaid what was owed, along with a big fine, as part of a confidential settlement.

However, that confidentiality has now been smashed by the weekend’s revelations, putting the company’s commitment to ethical behaviour and “robust and transparent corporate governance” in the public glare.

Investors are now worried that Mr Ellison’s grip on MinRes could be threatened by scrutiny from regulators as well as an external probe by the company’s board into whether shareholders were disadvantaged by payments made by MinRes to the Ellison-owned offshore companies.

There is also the prospect of class actions targeting MinRes’ disclosure on behalf of shareholders burnt in this week’s rout.

It has not been overlooked by observers that the MinRes board has said its outside investigation by an unnamed legal firm is “well advanced”, suggesting that directors could have been aware of the matters for some time.

The crisis has attracted the attention of South Australian Greens senator Barbara Pocock, who has targeted corporate misconduct in parliamentary grillings.

On X on Tuesday, Senator Pocock questioned why the ATO had agreed a secret settlement with Mr Ellison. “No such deal for Robotdebt victims ... but for the big end of town there are multiple roads to protection and deal making,” she posted.