MinRes to de-link with founder Chris Ellison after tax evasion scandal
Rewrites throughout with more detail, company comments, and latest share price
Nov 21 (Reuters) -Australia's Mineral Resources MIN.AX said on Thursday it plans to unwind or exit deals with entities linked to its billionaire founder Chris Ellison after an internal probe found he misused company resources for personal gain and tax evasion.
The diversified miner is reviewing its leases of properties from entities linked to Ellison, who has offered to sell them, its 49% stake in a trust where Ellison's consortium holds the remaining stake, and other deals with people close to him including his daughter and brother.
"The future of all transactions and arrangements of this nature is they won't exist unless there is a strong, compelling business reason to retain them," Mineral Resources (MinRes) said in a statement after its annual general meeting.
Any arrangements would need to be on strictly commercial terms with regular oversight and independent review, the company said.
Ellison "lacked judgement" from time to time, MinRes said. Last month he admitted to failing to properly disclose revenue from his overseas entities to the Australian Taxation Office, prior to listing Mineral Resources in 2006.
"The board accepts that Chris' intention was never to cause detriment to the company or its shareholders, and there were processes in place for amounts to be repaid to the company in a timely manner," MinRes said on Thursday.
The scandal has erased over 25% of the miner's share value since Oct. 21, drawn criticism from pension fund HESTA which placed the miner on its watchlist, led to a Moody's rating downgrade, and prompted AustralianSuper to reduce its stake below the substantial shareholderthreshold.
"I acknowledge that I made mistakes, some of which were driven by my wish to keep private certain events that cause me great personal embarrassment," Ellison said in a statement earlier this month.
MinRes shares were down 0.8% as of 0334 GMT on Thursday, while the ASX 200 benchmark index .AXJO was marginally down.
Ellison, who led MinRes through its listing in 2006 and remains its largest shareholder, will remainas managing director. While a search for a successor is underway, MinRes expects to complete the process within the next 12 to 18 months.
Reporting by Sameer Manekar, John Biju and Rajasik Mukherjee; Editing by Rashmi Aich and Michael Perry
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