The Australian Securities and Investments Commission has launched an investigation into Mineral Resources (ASX:MIN) amid concerns over corporate governance, increasing pressure on the company's board and CEO, Chris Ellison.
ASIC's probe reportedly focuses on potential breaches of directors' duties and MinRes' disclosure obligations.
This comes after investors were rattled by revelations of Ellison's past tax evasion, leading to a sharp decline in the company's stock.
MinRes shares have plunged 18% this week, including a 4.25% drop on Oct. 22, closing at $37.87. The company has now shed over $1.6 billion in market value since Oct. 18.
The stock slide follows media reports exposing Ellison's failure to declare income from offshore companies he co-owned before MinRes joined the ASX in 2006.
The companies bought and sold mining equipment for resale in Australia. Ellison has admitted to the tax evasion, calling it a "serious lapse of judgement."
Years later, he self-reported to the Australian Tax Office and settled the matter with a significant fine.
The weekend's revelations have cast doubt on MinRes' commitment to ethical corporate governance.
Investors are now concerned about potential regulatory scrutiny and the outcome of an internal board investigation into whether shareholders were disadvantaged by payments made to the Ellison-owned offshore entities.