By John Biju and Aaditya GovindRao
(Reuters) -Australian miner Mineral Resources’ billionaire founder Chris Ellison admitted to failing to properly disclose revenue from his overseas entities to the Australian Taxation Office on Monday, sending the company’s share price sharply lower.
Mineral Resources (MinRes) shares fell as much as 13.7% to A$39.59 by 0310 GMT and were heading for their worst trading session since late November 2009, while the broader benchmark index was up 0.7%.
Ellison said that prior to listing Mineral Resources in 2006, he and his business partners operated entities overseas that imported mining equipment into Australia. Some of that revenue was not disclosed to the tax office, he said.
Ellison, who is the biggest shareholder of MinRes with an 11.5% stake, told Reuters the matter was “a serious lapse of judgement.”
“All outstanding tax, penalties and interest that should otherwise have been paid by me has been fully repaid, and the matter has been settled with the ATO,” Ellison said in a statement in response to media reporting about the issue.
The company has appointed an external legal counsel to investigate the matter and the investigation is well advanced, Mineral Resources said in a statement on Monday.
Analysts at RBC Capital Markets said the share price move was overdone, given that there appeared to be no impact on operations or management at face value.
“Currently, there appears to be confidence in Ellison’s ability to manage/run the company, however until the investigation is finalised, there will likely be an overhang on the stock,” the analysts said.
MinRes said it had full confidence in Ellison and his leadership.
(Reporting by John Biju and Aaditya Govind Rao in Bengaluru; Editing by Lisa Shumaker, Stephen Coates and Subhranshu Sahu)
