Mineral Resources chair Malcolm Bundey has moved to reassure investors that Chris Ellison was "not involved" in deliberations to acquire his brother’s collapsed Resource Development Group.
Mineral Resources chair Malcolm Bundey has moved to reassure investors that Chris Ellison was "not involved" in deliberations to acquire his brother’s collapsed Resource Development Group.
His comments come as MinRes executed the deal to acquire the garnet mining and diversified services group of subsidiaries and assets – in return for forgiving about $160 million in debt – which were controlled by Mr Ellison's younger brother Andrew Ellison.
The deal comes against the backdrop of public and shareholder scrutiny over Mr Ellison's series of corporate governance failures, including revelations of related party transactions, over which he was due to depart the company he founded.
On Tuesday, the iron ore and lithium miner told the market it had executed the binding asset and share sale deal with the McGrathNicol administrators for RDG, which called in the insolvency practitioners in July after MinRes declined to extend further funds to meet operating expenses.
It came after MinRes lobbed an asset and share purchase deal for each of the subsidiaries in return for waiving about $161.5 million worth of debt, using its position as the major and first ranking secured creditor. RDG's main asset was the Lucky Bay garnet mine near Kalbarri.
McGathNicol recommended creditors vote in favor of MinRes’ deal - out of the seven non-binding indicative offers put forward - which gained creditors' blessing earlier this month.
RDG’s board was led by Mark Wilson, the chief financial officer of MinRes, and it counted the miner's chief executive mining services Mike Grey as a director.
The miner previously awarded work in RDG's direction through a $140 million contract on the Onslow Iron project.
MinRes booked a $192 million impairment on its investment in RDG, which contributed to the iron ore and lithium miner's near $900 million full-year loss.
Today, MinRes told the market it would be “assessing options to best realise value from the assets for the company’s shareholders”.
The miner also moved to reassure investors that Mr Ellison and the MinRes nominees on the RDG board were not involved in the decision making process.
“All decisions relating to RDG and the acquisition have been undertaken by the MinRes board, with managing director Chris Ellison and MinRes nominees on the RDG board not involved in deliberations,” MinRes told the market.
Mr Bundey – who took on the post from former chair Mr McClements in July – said he and the board sought to ensure the decision was conflict free.
“The board and I sought to ensure that MinRes shareholders could realise some value from their investment, and that there were no perceived conflicts in our decisions on RDG’s future,” he said today.
“I want to thank RDG’s employees for continuing to operate safely and productively during this process.”
No misconduct or breach of director's duties and no evidence of any of wrongdoing between the two brothers or the cross over board members were identified in the administration's preliminary investigations, McGrathNicol's report outlined.
In late July, RDG voluntarily called in McGrathNicol administrators Rob Brauer, Jason Ireland and Linda Smith after MinRes’ board declined to provide an advance against the existing loan requested to meet operating expenses.
Upon RDG's collapse, MinRes informed the market its board nominees had been excluded from that review process and decision.
MinRes' 64.3 per cent shareholding in RDG and its loan trace back to a deal struck in 2020, when the group bought two manganese assets from MinRes.
