Mineral Resources’ Ellison faces probe from Australian watchdog

The Australian Financial Review reported ASIC’s probe on Wednesday. The watchdog will look at whether the miner’s directors breached their duties, and require the company to hand over a report commissioned by the board to investigate the allegations, the newspaper said, without citing sources.

Ellison, who is managing director of Mineral Resources and still a major shareholder, said the payments pre-dated the company’s 2006 listing, and came from overseas entities he and his business partners operated that sold mining equipment and parts. He did not declare the income from the supply contracts.

The mining magnate described his actions in a statement on Monday as “a poor decision and a serious lapse of judgment.” He had subsequently “voluntarily” disclosed the matters to the Australian Taxation Office in full, with all outstanding tax, penalties and interest repaid.

Shares in Mineral Resources, which has operations including iron ore and lithium production, have dropped more than 20% so far this week following an initial report by the AFR over the weekend. That’s wiped almost A$2 billion ($1.33 billion) from the company’s market value since Monday.

The company’s board said earlier this week it retained confidence in Ellison, and would update the market once it had completed internal inquiries.

Earlier this year, Ellison — a larger-than-life figure even by the standards of Australian business — made headlines after stating he wanted to prevent employees at the company’s office from leaving the building to buy coffee.

(By Sybilla Gross)