And in other news, the board of embattled miner Mineral Resources has confirmed it was advised of boss Chris Ellison’s alleged tax evasion more than two years ago, but opted against disclosing a probe into the claims over fears it would fuel “speculation”.
In a statement penned following queries from the ASX, the board confirmed it engaged law firm Herbert Smith Freehills to conduct an external probe in June 2022.
Mineral Resources CEO Chris Ellison described a 10-year tax scheme as “a poor decision and a serious lapse of judgement”.Credit: Trevor Collens
But it defended its action, insisting the allegations concerned payments made more than 15 years ago which it deemed a personal matter for Ellison and the Australian Tax Office.
It also claimed it did not believe its decision to recruit external lawyers would have a material impact on share prices.
“Although the scope of a corporate investigation can include allegations that have the potential to be materially price sensitive if substantiated, the fact that external legal counsel has been appointed to conduct the investigation is not, of itself, materially price-sensitive information,” the board said.
“Disclosure in such circumstances would be premature and likely to lead to speculation in the market that cannot be reliably addressed.”
It has been just over one week since the Australian Financial Review claimed Ellison and four other MinRes executives made millions using offshore companies to peddle an equipment markup scheme.
Since the publications, the share price has dropped more than 20 per cent and shaved almost $2 billion off the company’s value, bringing it down to $7 billion.
The AFR alleged the scheme was devised in 2003 and continued operating three years after the company’s initial public offering in 2006, with the payments listed as liabilities in financial statements at the time. The revenue generated by the overseas entities benefiting was allegedly not disclosed to the Australian Taxation Office until 2022.
The board conceded the share price spiral had been underpinned by media speculation, governance considerations, and uncertainty concerning Ellison’s ongoing leadership and could continue until a decision on the company’s future is made.
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