The Mineral Resources Ltd (ASX: MIN) share price rose by 7.7% to an intraday high of $37.18 on Tuesday.
This followed the company's response to questions it received from the market operator on Friday.
It's been a very tumultuous fortnight for the ASX 200 mining stock following media reports of personal tax evasion allegations involving its founder and CEO, Chris Ellison, on 19 October.
Since then, the Mineral Resources share price has fallen by 19%.
Let's recap.
Mineral Resources share price rises amid company response
In a letter on Friday, the ASX asked Mineral Resources whether it considered three pieces of information to be price-sensitive.
The first was that since the company's IPO in 2006, payments it made to offshore entities connected with Ellison related to pre-IPO contracts that were listed as liabilities in its financial statements at the time.
The company said it did not consider this information to be price-sensitive and commented:
… the "offshore [entity] connected with Mr Ellison" is Far East Equipment Holdings Limited (FEEHL); … the "payments made by MIN" to FEEHL "since its IPO in 2006" comprise two payments: the first by MIN subsidiary Crushing Services International Limited (CSI) on 30 August 2006, and the second by MIN itself on 21 January 2008, the two payments totalling $3,790,607.28; and the "pre-IPO sales contracts that were recognised as liabilities in the Company's financial statements at the time" were in respect of mining equipment that CSI had purchased from FEEHL in 2004. These sales contracts were entered into before MIN came into existence at the time of its IPO, but involved entities that formed part of the MIN group upon IPO.
The second piece of information related to Ellison's self-reporting to the ATO of undeclared income.
Mineral Resources said it did not consider this price-sensitive because it related to Ellison's personal tax obligations and had been resolved.
The company added:
… while Mr Ellison's failure to declare income to the ATO was a serious error of judgement on
his part, it did not displace the Board's confidence in his capacity to manage MIN.
The third piece of information was that Mineral Resources had engaged external lawyers to investigate this matter. Again, the company disagreed that this was price-sensitive information.
Mineral Resources said disclosure of the investigation would have been premature and would have likely led to speculation in the market that could not be reliably addressed.
What did the company say about its share price decline?
The ASX asked Mineral Resources if it was aware of any unannounced information that may have contributed to recent share price volatility.
The company said:
MIN understands that the key drivers for the negative movement in MIN's share price since the
announcement released to the ASX on 21 October 2024 … have been general media speculation, governance considerations and uncertainty regarding Mr Ellison's ongoing leadership of MIN.MIN also notes media speculation and coverage regarding ASIC making inquiries. MIN acknowledges that there may be continued speculation until the Board is able to determine matters.
Aside from the ongoing investigation which has been referenced in the 21 October Announcement
and the subsequent announcement made to the ASX on 28 October 2024 …, MIN is not aware of any other information potentially known in the market that has been driving the recent share price movement.
What's the latest on all this drama?
Yesterday, the company issued an update on its investigation.
Mineral Resources said:
The MinRes Board takes seriously allegations in relation to any of its people.
There has been considerable media coverage since 19 October 2024 and the Board's investigation has evolved to respond to statements that do not accord with the Company's understanding of the facts.
The Company is working to resolve these inconsistencies, recognising that some of the reported matters date back to before the Company's formation and ASX listing in 2006.
The miner said Ellison was cooperating with the investigation. It said he is currently on planned leave and will return to work next month.
Mineral Resources said the board intended to issue an announcement by next Monday regarding its conclusions and the actions it intends to take.
