In a stunning mea culpa, mining billionaire Chris Ellison has expressed deep remorse to shareholders after his company, Mineral Resources, was rocked by a series of tax and governance scandals. Speaking at the company’s tumultuous annual general meeting, the embattled CEO did not mince words: “I can’t stress enough how much I hate what I’ve done; a dark cloud in my life that I’ll live with forever.”
The Perth-based businessman, who founded and leads the mining and infrastructure giant, acknowledged that earlier in his career he had failed to disclose revenue generated by overseas entities to tax authorities. Further compounding the company’s woes, an internal investigation revealed that Ellison had also misused corporate resources for personal benefit.
Addressing the AGM, Ellison admitted to making an “error in judgment” and said, “I deeply regret the impact this has had on the business and our people.” The contrite mining boss announced he would step down from his role within 18 months, while company chair James McClements will also depart before next year’s shareholder meeting.
Shareholder Backlash and Executive Pay Rejection
Mineral Resources’ shares have been battered in recent weeks, with the stock price plummeting by half this year due to a combination of weak commodity markets and the sell-off triggered by the governance scandals. Shareholders expressed their fury at the AGM, overwhelmingly rejecting the company’s executive remuneration report.
In a resounding rebuke, more than 65.6 million votes were cast against the pay plans, compared to just 21.3 million in favor. The vote constitutes a “first strike” against executive compensation, which could lead to a board spill if the result is repeated at next year’s meeting.
“We were not in a position to disclose information because it was subject to ongoing inquiries,” chairman McClements told disgruntled investors who questioned why the board had not proactively informed them of the governance issues prior to media reports.
– According to a source close to the company
Tax Troubles and Belated Disclosures
Ellison revealed that prior to Mineral Resources’ 2006 public listing, he and his business partners had operated overseas entities to purchase mining equipment for import and sale in Australia. Some of that machinery was subsequently sold to MinRes itself.
While apologizing for the failure to disclose this revenue to authorities at the time, the mining magnate informed the Australian Tax Office of the matter in 2021. All outstanding taxes, penalties, and interest have since been repaid. “I own those mistakes, and I’m standing here, I take full responsibility for them,” Ellison emphasized to shareholders.
From Mining Services to Major Player
Mineral Resources, which began as a mining services company, has grown into a significant mining and infrastructure business with extensive iron ore and lithium assets. Ellison, a high-profile figure known for his record-setting $57.5 million Perth home purchase in 2009, has garnered attention for his outspoken views, including recent criticism of flexible work arrangements.
As the fallout from the scandals continues to reverberate, Mineral Resources faces the challenge of rebuilding investor trust and navigating leadership changes amid a turbulent period for the mining industry. With Ellison’s impending departure and a board shakeup on the horizon, the company’s future direction remains uncertain.
The unfolding drama at Mineral Resources serves as a stark reminder of the importance of robust corporate governance, transparent disclosure, and the potentially severe consequences when business leaders fail to meet these standards. As the mining sector grapples with economic headwinds and increased scrutiny, companies will need to prioritize ethical conduct and clear communication with stakeholders to maintain their social license to operate.
