HESTA sells remaining stake in Mineral Resources due to ‘serious’ governance issues following board departures

Superannuation fund HESTA has bailed out of Mineral Resources over persistent “serious governance concerns”, but shares in the embattled miner have risen. HESTA said its decision followed the “sudden resignations” of three MinRes directors in April, who together formed the ethics and governance committee that was established in November 2024. The trio — Denise McComish, Jacqueline McGill and Susie Corlett — all left the committee and MinRes altogether within the space of a week with no explanation. The committee was established after revelations in October that founder and chief Chris Ellison was involved in historic tax evasion on co-owned offshore companies and used MinRes for personal benefit via a series of related-party transactions. Mr Ellison agreed to step down by the middle of next year and chairman James McClements is also supposed to be out the door by the end of this year. But the desertion of the ethics and governance committee raised questions about the progress of MinRes’ promise to address major shortcomings in its governance and the timelines for the agreed exits of Mr Ellison and Mr McClements. “Last year we outlined our concerns that the managing director’s succession timeframe did not reflect the seriousness of the issues, and the issues indicated a systemic failure of governance,” HESTA chief executive Debby Blakey said on Monday. “We have since regularly engaged with senior leaders and directors at the business to encourage action we believe necessary to restore investor confidence. “The departures of the directors on the ethics and governance committee last month in our view represented a significant step backwards in seeking to address the serious governance concerns. Given these departures and the forthcoming succession of the chair, we don’t currently see a path to our concerns being addressed.” A MinRes spokesman said the company “remains committed” to “strengthening corporate governance and creating value for all shareholders”. “The appointment of the new board chair is well advanced, and they will be involved in any recruitment process for new directors,” the company spokesman said. “As previously stated, the ethics and governance committee will be maintained going forward.” HESTA placed MinRes on its “watchlist” in October based on the view “appropriate action was not being taken” to address governance issues. At the time of the watchlist addition, HESTA held 0.9 per cent of the company — equating to about 1.8 million shares — and by the end of last year had reduced that stake to 0.4 per cent. Those 1.8m shares would have been worth about $83m prior to the October revelations. That has been whittled down to $40.3m at the current share price. But MinRes’ broader shareholder base did not appear too concerned with HESTA wiping its hands clean of the company. Shares in the lithium and iron ore miner finished up 8.3 per cent to $22.81.