Mineral Resources Founder Under Investigation by Australia’s Corporate Watchdog

Australia's corporate regulator, the Australian Securities and Investments Commission (ASIC), is investigating Mineral Resources and its founder, Chris Ellison, following allegations of undeclared payments that allowed Ellison to avoid tax. A spokesperson for ASIC confirmed that the regulator is aware of the situation, is monitoring developments, and has begun initial inquiries, though further details have not been provided.

The Australian Financial Review (AFR) first reported on the ASIC probe on Wednesday. According to the AFR, the investigation will examine whether Mineral Resources' directors breached their duties and will require the company to hand over a report commissioned by the board to investigate these allegations.

Chris Ellison, who serves as managing director of Mineral Resources and remains a major shareholder, acknowledged that the payments in question pre-dated the company's 2006 public listing. These payments originated from overseas entities operated by Ellison and his business partners, which were involved in selling mining equipment and parts. Ellison admitted that he did not declare the income from these supply contracts.

In a statement released on Monday, Ellison described his actions as "a poor decision and a serious lapse of judgment." He also noted that he had voluntarily disclosed the matter to the Australian Taxation Office, repaying all outstanding taxes, penalties, and interest.

Shares of Mineral Resources, which is involved in iron ore and lithium production, have dropped more than 20% so far this week following the initial report by the AFR over the weekend. This decline has erased almost A\$2 billion (\$1.33 billion) from the company's market value since Monday.

The board of Mineral Resources has expressed confidence in Ellison, stating earlier this week that they would provide updates to the market once internal inquiries are completed.

Earlier this year, Ellison made headlines for a different reason when he announced plans to prevent employees at the company's office from leaving the building to buy coffee—a statement that garnered widespread attention.