Mineral Resources says it's investigating founder over tax issue
Australia’s Mineral Resources is probing payments linked to founder and MD Chris Ellison, even as the board said it has full confidence in him and his leadership.
“Since its IPO in 2006, payments made by Mineral Resources to offshore entities connected with Mr Ellison related to pre-IPO sales contracts that were recognised as liabilities in the company’s financial statements at the time,” Mineral Resources said in a statement Monday.
“Mr Ellison self-reported to the Australian Taxation Office, repaid amounts owed and disclosed these matters to the board,” it said. “While this does not diminish what happened, Mr Ellison profoundly regrets his errors of judgment.”
Shares of Mineral Resources fell as much as 14% in early trading in Sydney.
Ellison became one of Australia’s wealthiest directors thanks to his large stake in Mineral Resources. Earlier this year, he made headlines after stating he wanted to prevent employees at the company’s office from leaving the building to buy coffee.
Perth-based Mineral Resources has a market value of about A$9-billion, with operations across iron-ore, lithium production and natural gas.
“The board has full confidence in Mr Ellison and his leadership of the Mineral Resources executive team,” it said Monday, adding it will issue a further statement once its inquiries are completed.
A report in the Australian Financial Review over the weekend said Ellison was connected to a company known as Far East Equipment Holdings, which bought mining equipment and sold it to Mineral Resources at an inflated purchase price. Mineral Resources then claimed depreciation in its tax returns, according to the report.
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