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Mineral Resources (ASX:MIN) has reportedly started work on a “Plan B” succession plan that would see a new leader take the helm at the under-investigation Western Australian miner at the same time as several directors stepping down.
This secondary battle plan was put in motion last week, The Australian reports, should internal investigations point to a fresh start being the best course of action.
MinRes has been at panic stations for a week as it looks to answer ASX inquiries regarding managing director Chris Ellison and his admissions about a tax evasion scheme.
Question marks have hung over Mr Ellison’s future since he admitted to failing to properly disclose personal revenue to the tax office – a failing the MinRes founder described as “a serious lapse of judgment.”
It was reported five men – including Mr Ellison – used a company in the British Virgin Islands to sell cheap mining machinery to MinRes at huge mark-ups.
The MinRes board backed its under fire managing director, but that hasn’t stopped company powerbrokers preparing for other eventualities. Since the Australian Financial Review made the allegations on October 18, the miner’s shares has suffered a $2.4 billion nosedive through to today; MinRes last traded at $34.95.
One sticking point will be that “a number of big investors” reportedly want Mr Ellison to stay.
Either way, MinRes today shared its internal investigation – commissioned by the miner and run by law firm Herbert Smith Freehills – as well as how the company intends to respond will be unveiled by November 4.
MinRes chairman James McClements said the board will be looking to “strike the appropriate balance of all factors” to best serve shareholders.
“The board’s response is driven by high governance principles and the best interests of MinRes shareholders, now and into the future,” Mr McClements said.
“We are determined to ensure that this is the path for MinRes long into the future, and we understand our role as a board is to strike the appropriate balance of all factors, so this is delivered for our investors.
“At the same time, it remains focused on generating sustainable value for its shareholders.
“There has been significant board renewal in the past two years and the board today comprises directors who individually and collectively have an unswerving commitment to strong governance and are committed to continuous review and improvement.”
Mr Ellison was on leave overseas when everything ran in the Financial Review earlier this month. MinRes’ managing director is expected back in November.
New Zealand-born Ellison and others established Mineral Resources as a major shareholder in 2006 when PIHA, Crushing Services International, and Process Minerals International merged.
The 67-year-old became a billionaire in 2020 off MinRes’ then-record highs.
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