The industry super fund confirmed the sale of its remaining stake in MinRes on Monday, pointing to the sudden resignation of three directors in April, who formed the ethics and governance committee, as a “significant step backwards” in attempts to restore investor trust.
This marks the culmination of a months-long engagement effort by HESTA, which placed the mining and services firm on its governance watchlist in October 2024, due to serious concerns about the company’s handling of historical misconduct allegations against founder and managing director Chris Ellison.
The fund had already begun trimming its exposure last year after revelations that Ellison had profited from an offshore equipment mark-up scheme between 2003 and 2009, prompting shareholder outrage and scrutiny from institutional investors.
In response, the board imposed financial penalties and announced an 18-month succession timeline.
But HESTA chief executive Debby Blakey said those measures fell short of addressing systemic failures in board oversight.
“Last year we outlined our concerns that the managing director’s succession time frame did not reflect the seriousness of the issues, and the issues indicated a systemic failure of governance. We have since regularly engaged with senior leaders and directors at the business to encourage action we believe necessary to restore investor confidence,” Blakey said.
“The departures of the directors on the ethics and governance committee last month, in our view, represented a significant step backwards in seeking to address the serious governance concerns.
“Given these departures and the forthcoming succession of the chair, we don’t currently see a path to our concerns being addressed.”
The governance committee, formed just six months ago as a signal of reform, was intended to guide board renewal and ethical oversight in the wake of Ellison’s misconduct admission.
In a statement to the ASX last December, outgoing chair James McClements admitted the board was “profoundly disappointed” by Ellison’s conduct and acknowledged the need for “significant strengthening” of governance protocols.
Ellison, for his part, issued a public apology and pledged to “win back the confidence of investors”.
But HESTA, a fund focused on the delivery of strong long-term returns to its members, has concluded that the company has failed to demonstrate a credible path forward.
“[We] believe selling our remaining holdings was in their best interests at this time. We may reconsider our position if circumstances change”, Blakey said.
The super fund also reiterated on Monday governance concerns at other ASX-listed firms, including WiseTech, Santos and Woodside. However, it has shown willingness to reverse divestments, previously removing AGL and Origin from its watchlist after improvements in their climate strategies.
