HESTA places MinRes on watchlist due to governance concerns
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The news: HESTA has placed Mineral Resources on its watchlist in response to recent governance failures inside the mining group, which may see the industry superannuation fund consider voting against director elections, supporting or filing shareholder resolutions, or divesting its shareholding in the company.
The context: HESTA said it is "disappointed" by MinRes' response to recent governance failures, after its managing director Chris Ellison admitted to involvement in an alleged tax evasion scheme involving offshore companies.
On Monday, MinRes announced that Ellison would step down following an 18-month transition period and forgo over $13 million in penalties on top of a $5 million donation to charity. Chair James McClement will also exit by next year’s annual general meeting.
HESTA noted that Ellison's succession timeframe "does not reflect the seriousness of the issues", and that "the issues identified indicate a systematic failure of governance at the senior management and board level".
The super fund said it would consider divestment if it considered there was "inadequate evidence of progress to address risks and it is in members' best financial interests".
Alongside MinRes, Woodside and Santos remain HESTA watchlist companies.
What they said: "We believe the MinRes board has a critical opportunity ahead of the company's upcoming annual general meeting to provide investors with confidence they are taking appropriate action to address these governance failures," HESTA said.
The source: HESTA media release
