The Mineral Resources Ltd (ASX: MIN) share price is down more than 11% as the market reacts to news reported over the weekend.
Mineral Resources is involved in a number of resource-related activities including mining services, iron ore mining and lithium mining.
Pain following Chris Ellison reports
Over the weekend, the Australian Financial Review reported that an investigation uncovered that Mineral Resources’ boss Chris Ellison allegedly evaded tax for years.
In an ASX announcement, the miner said the board is committed to robust and transparent corporate governance. Therefore, it has engaged external legal counsel to conduct an investigation into this matter and advise the board.
Mineral Resources noted that Ellison has cooperated with the investigation, and the investigation is “well-advanced”.
The ASX miner said since its initial public offering (IPO) in 2006, payments made by Mineral Resources to offshore entities connecting with Ellison related to pre-IPO sales contracts that were recognised as liabilities in the company’s financial statements at the time.
Mineral Resources said the matters related to Ellison’s personal tax matters, he self-reported to the Australian Taxation Office, repaid amounts owed and disclosed these matters to the board. The ASX miner also said “Mr Ellison profoundly regrets his errors of judgement”.
The company said the board today “comprises directors who individually and collectively have a strong focus on governance and are committed to continuous review and improvement.”
Despite the current ongoing issues, the board said it has “full confidence in Mr Ellison and his leadership of the MinRes executive team”.
The Mineral Resources board will “issue a further statement regarding this matter once its enquiries are completed”.
Final thoughts on Mineral Resources shares
The business may well have an attractive future, with a number of growth avenues, but I’m not sure this is the right time to invest following a rapid rise of the iron ore price and this current cloud overhanging the business.
There are other ASX growth shares and ASX dividend shares I’d rather buy instead.
