MELBOURNE - Australian superannuation fund HESTA said on Friday it has placed Mineral Resources  on its watchlist, citing disappointment with the company's inadequate response to governance issues involving billionaire founder Chris Ellison.

Shares of the company fell as much as 2.5% to A$40.610 as of 00:55 GMT. The news has wiped out over 7% in market value so far this week since the MinRes' internal probe concluded on Monday.

Pressure is mounting on the company's board over its support for founder and managing director Chris Ellison to stay at the role for an extended period before he steps down.

Earlier this week, Min Res said Ellison would exit the company within 18 months after an internal probe found him guilty of evading taxes and using company resources for his personal benefit.

Ellison acknowledged at the time that he had made mistakes and had sought to minimise his public embarrassment. Min Res did not immediately respond to a request for further comment on Friday.

"Our concerns include that the managing director's succession timeframe does not reflect the seriousness of the issues and that the issues identified indicate a systemic failure of governance at the senior management and board level," HESTA said in a statement.

The deputy chair of Australia's Securities and Investment Commission (ASIC), Sarah Court, told lawmakers in Canberra on Thursday that ASIC and the Australian tax office had begun an investigation into Min Res' affairs, but that it was too early to talk about consequences, if any.

At the same time, Moody's Ratings revised the miner's outlook to "negative" from "stable" to reflect the potential implications of the company's corporate governance issues. The global ratings agency affirmed the "Ba3" corporate and senior unsecured bond ratings for MinRes.

"The company's managing director transitioning from the role over the next 12 to 18 months also creates uncertainties around the company's future, strategic direction and financial policy settings", Moody's said in a statement.

As of October 24, HESTA's portfolio exposure to MinRes stood at 0.83%, the fund confirmed to Reuters earlier this week.

HESTA said it subjects watchlisted companies to increased monitoring and direct engagement, with an escalation framework that may involve voting against directors, supporting or filing shareholder resolutions and potentially divesting.

These measures are enacted when HESTA finds insufficient progress in risk mitigation and deems such actions to be in the best financial interests of its members.

"Alongside MinRes, Woodside and Santos remain HESTA watchlist companies," it said.