Meet Chris Ellison’s personal accountant

 

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The Maritime Anti-Corruption Network, a governance network that includes more than 200 global shipping industry groups, stresses the importance of transparency and due diligence in the sector. 

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MeetChris Ellison’s personal accountant

Yenna Ong, the number cruncher who managed the Mineral Resources founder’s private affairs, rapidly gained great power. Then just as suddenly, she was gone.

Neil ChenowethSenior writer

Nov 9, 2024

The eyes are compelling, the smile carries a hint of mystery, but most of all the full-page studio portrait in the Mineral Resources 2023 annual report underlines the power that Yenna Ong wielded in the iron ore and lithium mining giant.

It’s a name few outside the company know. But Ong had the showcase treatment in the annual report given to members of the miner’s top executive team, intermingled with photos of a dozen Indigenous elders, all with inspirational quotes.

“Leadership means staying grounded but always keeping an eye to the future” was Ong’s contribution. And there’s a second picture of the director of international trade and strategy in a hard hat at the back of the report.

Ong is not just head of shipping and marketing. She is an accountant – the accountant, who manages MinRes founder Chris Ellison’s personal affairs from her office on level nine at the group’s Osborne Park headquarters, complete with a purpose-built document storage room that is kept locked.

She is also the first executive casualty in the governance crisis that has enmeshed MinRes and forced its directors to announce last Monday that Ellison would step down as chief executive in the next 18 months.

Ong was nowhere to be found in the 2024 annual report released two weeks ago. AFR Weekend can reveal she resigned from MinRes after directors confronted her over her personal work for Ellison.

The board had learned that in addition to her MinRes salary, Ong had a second employment contract, earning hundreds of thousands of dollars for managing Ellison’s private business.

While announcing Ellison’s exit last Monday, chairman James McClements said he would also step down before next year’s annual meeting. The announcement came two weeks after AFR Weekend’s revelation that Ellison and four other senior executives operated an alleged tax evasion scheme from 1993 to 2014, costing shareholders millions.

The five men are accused of selling machinery to the company at huge mark-ups through a British Virgin Islands company, Far East Equipment Holdings Limited, before cutting a sweetheart with the Australian Taxation Office in return for disclosing $6.7 million in unreported profits.

The news wiped 25 per cent off the group’s share price before the stock rebounded. It’s currently down 16 per cent.

Further Financial Review reports showed that MinRes was paying nearly $1 million a year, or 70 per cent above market rates, for four properties leased from Ellison and other executives since 2006. In 2017 MinRes sold machinery to a luxury New Zealand property, Halfway Bay Station – owned by Ellison and fellow director Tim Roberts – allegedly for well below current value.

After initially reporting on October 21 that “the board has full confidence in Mr Ellison and his leadership of the MinRes executive team”, last Monday directors said that Ellison had failed to be forthcoming with the board, had not acted with integrity, had not made timely disclosures of potential conflicts of interest, and had used company resources for his personal benefit.

The board confirmed many of the allegations made in an anonymous whistleblower’s complaint made in June 2022, which claimed that much of Ellison’s lavish lifestyle had been “paid for at the expense of MinRes shareholders”.

Directors said Ellison will repay $3.79 million that MinRes paid to the British Virgin Islands company Far East, donate $5 million to a charity over five years, and forfeit $6.5 million in long-term incentives that proxy advisers say had been unlikely to vest.

The board’s catalogue of Ellison’s misuse of company resources included “directing a company employee to manage his personal finances”.

McClements told fund managers on a telephone hook-up on Wednesday that the board recently “confronted” an unnamed executive, and told them that they had to choose between working for Ellison and working for MinRes.

In response, the employee handed in their notice, but for the moment continues to work on “mission-critical” matters. MinRes sources confirmed that the executive was Ong and that she had resigned.

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It’s a stunning reversal for Ong, whose brief as Ellison’s corporate “fixer” went well beyond shipping and marketing. When Ellison needed someone to act for him for his property plays or his barramundi farm in the Northern Territory, Ong was his representative. When MinRes sold machinery to Ellison’s Halfway Bay Station in April 2017, it was Ong who organised for it to be shipped to Dunedin on a bulk carrier named Himawari K.

A shipping agent tells The Australian Financial Review that shipping costs for such a package would typically run to $250,000, raising questions about why Halfway Bay Station did not buy the machinery in New Zealand. MinRes did not respond to questions about whether the group had paid for the cost of Himawari K.

Ong was not part of the offshore tax evasion scheme operated by Ellison and four other founding executives from 2003 to 2014, which has engulfed the group in a governance crisis. But she did receive a personal, unrelated mention in the June 2022 whistleblower complaint that the company says first alerted directors to the offshore scheme. Additionally, the complaint focused on the MinRes ship chartering operation.

A 2022 investigation for MinRes by Herbert Smith Freehills concluded that the complaint against Ong was not substantiated. The complaint did not hinder her smooth path to becoming one of the group’s key executives.

In December 2022, as her role at MinRes expanded, Ong set up her own company, Cacti Consulting Pte Ltd, in Singapore. Three months later, she joined the boards of new MinRes subsidiaries VP Minerals, Norwest Energy and Westranch Holdings Pty – and in China, she set up two new MinRes companies, Ningbo Greensko Lithium and Greensko Lithium (Jiangsu) Co Ltd, with combined registered capital of $US80 million.

In her shipping role, Ong has grown close to Chinese giant Cosco. On July 17 this year, she was at the Dalian Cosco Shipping Kawasaki plant to name two 82,000 deadweight tonnage bulk carriers with another Cosco executive, Xue Xiaobei. In September 2018, Ong was named “godmother” of another Cosco 400,000 deadweight tonnage carrier, the Yuan Yi Hi, at its launch.

It’s been a heady rise since Ong moved to Australia in 2004. Up to that point, Singapore corporate records show, Ong’s history had been more chequered – which is how she came to be mentioned in the whistleblower complaint filed in June 2022.

The complaint made a range of allegations against Ellison and other senior MinRes executives – including the offshore tax scheme and the above-market rate rents. In Ong’s case, the complaint referred to a $6 million fraud case before the courts in Singapore in which she became embroiled.

In 1992, Ong was sentenced to six months in prison in Singapore for helping a company director misappropriate $S282,000. Her conviction was overturned by Singapore’s High Court a year later, which found that while Ong had pleaded guilty, the prosecution’s statement of facts failed to include critical details.

Later the young accountant was joined as a party in a civil case brought by a PwC liquidator that dragged on past the year 2000. This saw the court award $S5.2 million in damages against Ong’s former boss for fraudulent conduct, which included false invoices that Ong had unwittingly signed.

How did it come to this?

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In 1989, Ong joined Hong Lam Marine, owned by chief executive Lim Teck Cheng. Lim was expanding from refuelling ships (known as bunkerage) to building small bunker tankers for oil companies such as Shell, through a new entity set up in mid-1989 called Wyno Marine, in which Lim held a 42 per cent stake.

Ong, as accountant for the group, was appointed to the boards of Hong Lam in September 1989, Wyno Marine in November, and Hong Lam Chartering three months later.

But Lim had a cash problem. He had a contract to produce a $S4.2 million bunker tanker, but the finance firm insisted Hong Lam commit $S500,000 of its own money – money that the company did not have.

The answer, which unfolded in June 1990, was that Lim would tap Wyno Marine’s money. On Lim’s instruction, Ong, as an officer of Wyno, unwittingly signed two bogus purchase orders for Lee & Kong Engineering Works.

Lee & Kong then invoiced Wyno for the fictitious work. Ong raised a payment voucher, which Lim signed, and the money went from Wyno to Lee & Kong, who promptly handed it back to Lim Teck Cheng. Ong’s boss told her to deposit the money in Hong Lam’s account marked as a loan from Lim.

Lim repeated this process with another set of false invoices, which did not involve Ong. She said that when she left the business in March 1991, she became aware of the fraud and urged Lim to repay the money, though he never did. Wyno went into liquidation eight months later.

In May 1992, Ong pleaded guilty to abetting fraud and was sentenced to six months in prison. She was released on bail of $S15,000 after she appealed.

In February 1993, Chief Justice Yong Pung How found that the facts presented by the prosecution after she pleaded guilty did not show that she had intentionally committed the offence. He said while “the activities described seem undeniably highly suspect … [it] cannot make up for an improperly drafted charge or statement of facts”.

Nine months later, Lim was convicted of making a misleading statement to Wyno’s auditors and fined $S10,000. However, in 1996, PwC liquidators appointed to Wyno brought a civil case against Lim. Court records show that Ong was added as a party to that case.

In 1999, the high court awarded $S5.2 million in damages against Lim for a series of fraudulent acts.

Ong was not found responsible for any of this, some of which took place after she left her job.

A MinRes spokesman in September dismissed questions about the case: “The legal matter you raise from 32 years ago in relation to Ms Ong was resolved more than a decade before she joined MinRes and has no relevance to her role with our company.

“The High Court of Singapore dealt with the matter in 1993 and Ms Ong was cleared of any wrongdoing.”

Ong said she did not know about the $S5.2 million judgment against Lim or that she was named in court documents as a party to the case, which continued into 2000 – or even that she had been a director of Hong Lam Marine.

Ong, by now 39, moved to Australia and in September 2004 joined Process Minerals International (one of the three core businesses that became MinRes). Her job as accountant quickly expanded to include arranging ship charters to carry ore.

Secrecy over maritime contracts is standard throughout the industry – and is reflected in MinRes’ shipping documents from 2014 obtained by the Financial Review. The Maritime Anti-Corruption Network, a governance network that includes more than 200 global shipping industry groups, stresses the importance of transparency and due diligence in the sector.

Pandora Papers, a 2021 leak of offshore documents obtained by the International Consortium of Investigative Journalists, revealed bank letters of credit covering sales of iron ore from Rio Tinto, Fortescue and MinRes to Chinese steelmaker Du Shuanghua through its Singapore hub, Bright Ruby Resources.

The conditions in the letters of credit are identical for the three Australian miners with one exception. Mineral Resources’ sale price and trade terms could not be disclosed: “All documents except drafts, invoice must not indicate L/C No [letter of credit number], L/C issuing date, name of bank, Invoice No., unit price, value of goods and trade terms.”

The reason for this extra layer of secrecy isn’t clear.

In the last four years, MinRes has spent $1.4 billion on shipping costs. “MinRes has a process in place to ensure its shipping arrangements are in line with the market, and at commercial rates,” a company spokesman said.