HESTA divests MinRes over ongoing governance issues

HESTA divested its remaining shareholding in Mineral Resources (MinRes) following the resignation of the miner's entire ethics and governance committee just six months after it was established.

The $89 billion fund put MinRes on watch in October last year after it failed to take appropriate action over concerns HESTA had about the company's governance, including allegations of tax evasion and misuse of company resources - primarily involving founder and managing director Chris Ellison.

HESTA said it will maintain a watching brief on the company, however any future investment would require "a demonstrated pathway to address our serious governance concerns, an effective mechanism to prevent similar issues occurring in future, and a timely and orderly succession of the managing director."

"Last year we outlined our concerns that the managing director's succession timeframe 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," HESTA chief executive Debby 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.

"We are focused on the delivery of strong long-term returns to our members, and believe selling our remaining holdings was in their best interests at this time. We may reconsider our position if circumstances change."

Santos, WiseTech, and Woodside remain on HESTA's watchlist.