In a significant shift for Australia’s mining industry, Chris Ellison, the billionaire managing director of Mineral Resources (MinRes), has announced his resignation following a company review that uncovered his “profoundly disappointing” conduct. Ellison’s departure marks the end of an era for the company he founded, which has grown into one of Australia’s leading iron ore and lithium producers.

The review, initiated amid rising scrutiny, revealed that Ellison had misused company resources for personal benefit. Allegations included failing to disclose revenue generated from overseas entities and utilizing MinRes employees for work on his private properties and personal finances. Additionally, he had directed resources for the benefit of his personal affairs, leading to significant ethical breaches that ultimately prompted the board to act.

The findings detailed instances where MinRes paid rent and offered rent relief to companies in which Ellison and his daughter held stakes, highlighting a troubling intertwining of personal and corporate interests. The board stated, “At times, Mr. Ellison has not acted with integrity,” indicating a lack of sufficient separation between his personal interests and those of the company.

Ellison has expressed regret over his actions, acknowledging the negative impact on the company’s reputation. “I acknowledge that I made mistakes, some of which were driven by my wish to keep private certain events that cause me great personal embarrassment,” he said. His admission of wrongdoing comes after a tumultuous period that included a settlement with the Australian Taxation Office (ATO) regarding unpaid taxes.

Following the announcement of Ellison's resignation, shares in MinRes saw a significant drop, plunging as much as 10% in early trading on Monday. By the close of trading, the company’s market capitalization had fallen nearly 30% over the past month to approximately A$7 billion, primarily due to the fallout from the tax revelations and the leadership crisis. Analysts have reacted strongly, with Citi's Kate McCutcheon reducing her target price on MinRes shares by 30%, citing ongoing uncertainties related to leadership transitions and a potential regulatory review.

MinRes, which has transitioned from a mining services company to a major player in the iron ore and lithium sectors, had previously enjoyed a robust reputation in the industry. However, the recent revelations and Ellison's subsequent resignation have put that reputation in jeopardy.

As MinRes embarks on a leadership transition, the company has initiated a succession plan aimed at appointing a new managing director within the next 18 months. Ellison will remain in his position until a successor is named, allowing for a handover that the board hopes will stabilize the company during this turbulent period.

The company has also engaged law firm Herbert Smith Freehills to conduct a comprehensive review of its corporate governance practices, aiming to reassure investors about its financial health and operational integrity. Last week, MinRes announced a deal to sell oil and gas assets to Gina Rinehart’s Hancock Prospecting for A$1.1 billion, a move that may help bolster its balance sheet amid the current challenges.

Ellison’s resignation follows a similar pattern observed in the Australian corporate landscape, where personal conduct has increasingly come under scrutiny. Just weeks earlier, the founder of WiseTech, Australia’s largest technology firm, stepped down following revelations about his personal life, indicating a broader trend of accountability within Australian corporations.

As the company prepares for a new chapter, analysts stress the importance of establishing strong governance structures to prevent future misconduct. “The slow pace of change will likely weigh on the stock,” warned McCutcheon, emphasizing the need for rapid, effective leadership changes to restore investor confidence.