7 questions lodged at 2024 Mineral Resources hybrid AGM

Q1. A question for one of our two Perth-based Ernst & Young audit signing partners, Darren Lewsen and Philip Teale: As part of their process auditing the 2024-25 accounts, did the EY team establish that the full amount of related party benefits obtained by CEO Chris Ellison has been repaid to the company? If not, how much is outstanding and how is the question of interest on the outstanding sums being accounted for? Did Mr Ellison fully co-operate with the audit team on the question of unravelling and making good on these past related party transaction benefits drawn by him?

Answer: Stonewalled by the chair but it at least it was read in full. The auditor didn't add much value. Watch video of exchange via Twitter, plus this earlier skirmish between EY's Darren Lewsen and John Campbell from the ASA.

Q2. A second question and final question from me on the accounts. Please read in full without editing: "The Board concluded that Mr Ellison, on occasions, used company resources for his personal benefit. This included directing employees to work on his boat and properties, directing an employee to manage his personal finances; and using the Company to procure goods and services for his private use. The board has stated that where the CEO has used the Company to procure goods and services, procedures existed to ensure that we got paid. In all seriousness, were these so-called "procedures" ever properly applied? If so, why did Mr Ellison's daughter back pay more than 10 years of rent only in 2022? How much has been repaid in total and when were these payments paid? Also, has the CEO repaid Mineral Resources for the portion of Yenna Ong's salary for the time she spent working on his personal affairs? If not, why not? Will the board undertake to investigate this particular related party transaction."

Answer: Stonewalled by chair James McClements but it at least it was read in full. Watch video of exchange via Twitter.

Q3. On related party transactions with the CEO, the chair today told shareholders and the wider market that MinRes will take steps to exit or unwind existing arrangements that no longer have a compelling commercial benefit for the company. For example, as the chair said, MinRes leases commercial properties from a consortium led by Mr Ellison – and has done since listing in 2006. These properties are indeed strategically and operationally important to MinRes and it is good to hear that the MinRes leases are at arms-
length and on commercial terms. Nevertheless, you say that "given the feedback from investors around minimising potential conflicts of interest, Chris is offering the properties for sale on market". As a member of the recently established ethics committee, could Jackie McGill AO provide her perspective on why the Board agree to a 10 year lease for these properties just before they were put on the market? Does the chair believe this was appropriate? Did we know Chris and his fellow investors would try to sell these properties so soon after we signed up for these 10 years leases.

Answer: Stonewalled by the chair but at least it was read in full. Watch video of exchange via Twitter.

Q4. It is a credit to Chris Ellison that he hasn't sold large licks of Min Res shares during the 19 years it has been a listed company with the founder in charge as CEO. His 22.58m MinRes shares represent 11.5% of all stock and are currently worth $769m based on the current share price of $34.05. Given the lack of major sell downs, I'm a little puzzled by the apparent size of Mr Ellison's external wealth and assets. The likes of Frank Lowy and Rupert Murdoch have answered this question in the past so there is precedent for asking it: given the current circumstances we're all in as minority shareholders in a complex public and private empire that Chris has built, could Chris please clarify whether his shareholding in MinRes is leveraged or pledged to external financiers into order to fund his extensive assets outside of MinRes. Does he have the financial strength to avoid having to sell down his MinRes shareholding during this period of financial pressure on MinRes directly with our $4.5 billion debt and in his private empire.

Answer: Stonewalled by the chair declared the question inappropriate but at least it was read in full. Watch video of exchange via Twitter.

Q5. A general question on Mr Ellison's mistakes. The CEO said the following in an ASX announcement approved by the board: "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.” Mr Ellison, what were the specific mistakes you referred to in the ASX Announcement and can you share your reflections on what motivated you to make the other mistakes, the ones which weren't motived by hiding personal embarrassment? Were any of your mistakes motivated by a desire for personal enrichment, even if it happened at the expense of the other 65,873 shareholders in our public company? Also, further on the issue of mistakes: the CEO did not disclose to the board the circumstances around his long standing disputes with the tax office until November 2023. Why the delayed internal disclosure and how big a mistake was this?

Answer: Stonewalled by the chair who should have asked Chris Ellison to respond but at least it was read in full. Watch video of exchange via Twitter.

Q6. Best practice is to disclose the proxies to the ASX with the formal addresses but you've withheld them today which is disappointing given the criticisms about poor or late disclosure in the past. Are we facing a remuneration strike and which of the proxy advisers recommended a vote against? Also, we have disclosed that Mr Ellison will pay $3.79m to company being the full amount of payments the Company made to FEEHL in 2006 and 2008 without adequate related-party disclosure. If Mr Ellison accepts he had to repay the amounts overcharged in 2006 & 2008, then why did the board not seek full restitution (including interest) over the last 18 years? Also, Mr Ellison will, in consultation with the Board, for a period of 5 years, make an annual charitable contribution of $1 million from his own funds. Can the chair explain precisely how this is in shareholders' interests and how this agreement will be enforced? And why didn't MinRes get this $5 million rather than this arrangement which presumably will generate a charitable tax deduction for Mr Ellison?

Answer: The chair should have summarised what the proxy advisers recommended but instead just stonewalled and waffled. Watch video of exchange via Twitter.

Q7. It has recently come to light that a number of Company emails relating to FEEHL were deleted in 2019. The board has concluded that this was an attempt to avoid information regarding FEEHL becoming public. These actions were taken at around the time that Mr Ellison commenced the process of self-disclosing to the ATO, and before the ultimate voluntary disclosure and settlement with the ATO. As a member of the ethics committee, has new director and board candidate Denise McComish established in her own mind who deleted the emails and why this occurred? Why did the Board think these emails would have become public if they weren't deleted in 2019? Did the deletion of emails relate to private litigation Mr Ellison was involved in?

Answer: Stonewalled by the chair but at least it was read in full. Watch video of exchange via Twitter.

Copyright © 2024 The Mayne Report. All rights reserved

• share
  Share
  • 
    Facebook
  • 
    Twitter
  • email
    Email
  • print
    Print
  • link
    Copy Link
  • cancel
    Cancel