On Monday, MinRes’ board announced the loose timing for the departure of Ellison and MinRes chairman James McClements, as well as financial sanctions for Ellison of up to $9 million.

While McClements will be out the door by next year’s annual meeting, Ellison could hang around for as long as 18 months. This prompts an immediate question: why allow Ellison such a lengthy exit?

Allowing him to remain – even if that accords with the wishes of some shareholders – further trashes what’s left of this board’s governance credentials. Shareholders may understandably be concerned about the management and strategic void a swift exit of Ellison would cause, but letting him stick around for as long as 18 months sends a dangerous message to corporate Australia.

The financial sanctions on Ellison won’t move the dial for the billionaire entrepreneur. The lion’s share of those sanctions involves the forfeiture of Ellison’s long- and short-term incentives – in other words, his bonuses. The remaining $3.79 million will involve him paying back to MinRes the money it paid to Ellison’s private company in 2006 and 2008 without adequate related party disclosure.

And then there is the $5 million Ellison will donate to charity and his personal mea culpa, which the miner says represents Ellison’s profound sense of embarrassment and his diminished reputation.

Loading

The first part of the issue involving Ellison is historical. It centred on a scheme involving a company associated with Ellison selling machinery to MinRes at inflated prices through a British Virgin Islands-incorporated vehicle. The profits from the said scheme were shared by Ellison, former chairman Peter Wade and four other founding executives at the mining company.

This inadvertently sucked MinRes into a tax evasion scandal that was not of its making. The board has admitted to becoming aware of this matter two years ago but argued there was no obligation to disclose it to the market.

That call on disclosure is staggering enough, but there’s more.

MinRes’ board admitted on Monday that financial benefits had been given to Ellison’s related parties, including rent relief to entities in which his daughter has an interest. Ellison also used company resources for his personal benefit – getting employees to work on his boat and properties and his personal finances, and using the company to procure goods and services for his private use.

The fact the board thought it worth noting this was not financially detrimental to MinRes is bizarre.

The use of MinRes as Ellison’s own ATM clearly suggests he viewed the listed company as his own private fiefdom, with the checks and balances any board would have in place sorely missing. And there’s every chance the latest announcements will not put this saga to bed.

The Australian Securities and Investments Commission must surely subject Ellison and MinRes to more stringent scrutiny. And class action legal firms will no doubt be limbering up.

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.