(Nov 4): Mineral Resources Ltd said its tycoon founder Chris Ellison will be penalized A$8.8 million (US$5.8 million, or RM25.4 million) and will step down within 18 months after the Australian miner launched an investigation into undeclared payments made to companies owned by him.

Ellison, managing director of Mineral Resources and still a major shareholder, had not acted with integrity, which sits at the core of the company’s values, according to statement from the company after it conducted an internal probe into the matter. He will remain as managing director until a successor is found.

Mineral Resources said on Oct 21 that the payments pre-dated the company’s 2006 listing, and came from overseas entities which he and his business partners operated, and which sold mining equipment and parts. He did not declare the income from the supply contracts.

Australia’s corporate watchdog has also launched initial inquiries into the claims.

“Regrettably, revenue generated by the overseas entities that we were beneficiaries of was not disclosed to the Australian Taxation Office at that time,” Ellison said in a statement on Oct 21. “This was a poor decision and a serious lapse of judgement.”

According to a report in the Australian Financial Review, Ellison struck a deal with the Australian Taxation Office to pay up the outstanding amount. In exchange, authorities did not disclose the figure owed and he will avoid a police or regulatory investigation.

Mineral Resources announced on Oct 31 that it was selling Australian oil and natural gas exploration permits to billionaire Gina Rinehart’s Hancock Prospecting Ltd, in a deal worth as much as A$1.1 billion. Shares of the company jumped as much as 16% after the announcement.

Earlier this year, Ellison — a larger-than-life figure even by the standards of Australian business — made headlines after stating he wanted to prevent employees at the company’s office from leaving the building to buy coffee.

Uploaded by Jason Ng