Shares of ASX-listed Mineral Resources Limited (AU:MIN) tumbled today after the company announced the exit of its founder and managing director Chris Ellison. The decision follows an internal investigation revealing that the billionaire had used company assets for personal purposes. MIN stock declined almost 9% as of writing.
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Shares have dropped around 20% since Ellison admitted to tax evasion allegations to the Australian Taxation Office (ATO) last month.
Mineral Resources is a mining company with operations in lithium, iron ore, energy, and mining services throughout Western Australia.
MinRes’ Founder Slapped with $8.8M Fine
As a result of the investigation, Mineral Resources’ board has slapped Ellison with a fine of $8.8 million, and he may further lose up to $9.6 million in pay. The move highlighted the company’s commitment to strong governance and reputation protection.
The company has initiated its search for a successor. However, Ellison will retain his role for the next 12 to 18 months.
Ellison’s admission last month followed a report revealing his long-term involvement in tax evasion, during which he later voluntarily disclosed millions of dollars in undeclared revenue to the ATO. Additionally, Ellison was linked to Far East Equipment Holdings, a company that acquired mining equipment and then sold it to Mineral Resources at a premium. Consequently, the board engaged the international law firm Herbert Smith Freehills to investigate the matter.
RBC Evaluates MIN Stock’s Trends
RBC Capital Markets analyst Kaan Peker expressed concerns regarding the pressures on MIN stock. He said that the primary concern in the medium term will be identifying Ellison’s successor.
Peker reaffirmed a Buy rating on MIN stock last month, reducing the price target from AU$66 to AU$63. The price implies an upside of 72.5% in the share price.
Is Mineral Resources a Good Buy?
According to TipRanks’ consensus, MIN stock has been assigned a Hold rating, backed by three Buys, six Holds, and three Sell ratings. The Mineral Resources share price target is AU$43.11, which is 17% above the current trading price.
Year-to-date, MIN stock has fallen 48%.
