Another director jumps ship at Magnis Energy

Tensions among Magnis Energy directors have spilt into public view after the company’s audit and risk committee chairman abruptly quit the hi-tech batteries player.

Magnis Energy chairman Frank Poullas. Picture: Britta Campion

Long simmering tensions among Magnis Energy directors have spilt into public view after the company’s audit and risk committee chairman abruptly quit the high-profile hi-tech batteries player.

Richard Petty had only joined the board in March, and the company gave no reason for his resignation. Dr Petty had been listed for re-election at the Magnis annual general meeting next week.

The Magnis board in October engaged a crisis consultant to address growing media and governance issues relating to the board, according to two sources briefed on the appointment.

That consultant began several days after Magnis was forced to respond to an ASX question about whether a company claiming to be a significant customer had sufficient resources to have entered the $334m agreement. He exited the company on Tuesday, unable to resolve the internal issues.

Dr Petty’s resignation came as The Australian reported that ex-Macquarie executive Bill Moss had withdrawn his directors – including his wife and son-in-law – from a Magnis subsidiary developing a $3bn lithium-ion battery plant in Townsville.

Sources close to Mr Moss’s private investment vehicle Boston Capital confirmed there was serious disquiet about how the Magnis board was operating.

Despite withdrawing his directors, Mr Moss on Thursday said he believed “the technology is sound and will be implemented and successful. This technology is critical, in our view, and should be utilised in Australia and not lost overseas,” he said.

“Boston Group remains a shareholder in (the project) and looks forward to this project coming to fruition.”

Boston Global founder Bill Moss. Picture: Adam Yip

Shares in Magnis, which owns a 63 per cent stake in manufacturer Imperium3 New York, rose around 150 per cent between August and November valuing the company at more than $600m.

Imperium3 plans to operate a plant in New York capable of producing market-leading batteries for use in electric vehicles. They will not require expensive cobalt and nickel components and can charge a vehicle in minutes.

On Thursday, Magnis said the New York plant was now 40 per cent complete.

Mr Moss’s Boston Global is a one-third owner in a separate, local Magnis project – Imperium3 Townsville. The company is part-owned by Magnis and an associated company, Charge CCCV.

Despite the rapidly rising share price, Magnis has been beset with governance issues including the resignation of several high-profile directors including another former Macquarie executive, Warwick Smith, and ex-NSW deputy premier Troy Grant.

McGrath Estate Agents founder James Dack departed after 11 months on the Magnis board.

The Australian this week reported that the corporate regulator had opened an investigation into Frank Poullas, the company’s chairman. It is unclear what matter the Australian Securities and Investments Commission is inquiring into, but the Australian Federal Police confirmed it had provided assistance.

While the corporate regulator has not outlined why it is making inquiries into Mr Poullas, ASIC has previously moved to deter the pumping up of the Magnis share price. Last month, the regulator entered a Telegram group of 400 traders, warning they could be breaking the law with a “pump-and-dump” campaign.

An artist’s impression of Townsville’s Imperium3 gigafactory, a state of the art lithium ion battery manufacturing facility.

“We can see all trades and have access to trader identities. We can identify underlying clients and networks of connected parties, and can also analyse trading patterns,” the regulator posted into the channel.

ASIC has now created more than 174 documents related to its inquiries into the Telegram group and related “pump-and-dump” activity around Magnis shares.

The Australian does not suggest Mr Poullas is involved in that activity, only that it is another focus of ASIC’s inquiries.

The disclosure of that investigation sent the Magnis share price down almost 20 per cent at 54c on Wednesday. Shares fell another 5 per cent on Thursday to 51c. Neither Magnis nor Mr Poullas responded to requests for comment.

Mr Poullas will stand for re-election at the Monday meeting. The company has formally recommended he be re-endorsed.

Magnis described Dr Petty as an adviser on significant projects and investments in Asia.

Former NSW policeman Michael Gerondis will replace Dr Petty as head of governance, compliance and risk. Mr Gerondis will not sit on the Magnis board.

Magnis noted Mr Gerondis’ “illustrious career spanning over four decades which has seen him receive many accolades”. Mr Poullas wrote that the board would like to thank Dr Petty “for his efforts both as a director and a consultant”. “Michael has hit the ground running as it’s great to have his experience as the company and team continues to grow,” Mr Poullas wrote.

Mr Moss, two sources close to Boston said, on Thursday spoke to Queensland officials and to Ms Hill about the Townsville project. Ms Hill had earlier said that while she could not comment on any ASIC investigation, “it is worth noting that this is a publicly listed company with shareholders able to hold Mr Poullas to account.”

“Townsville City Council is continuing to work in good faith with (Imperium3) on its proposed lithium-ion battery cell manufacturing facility at the Lansdown Eco-Industrial Precinct,” she said.

“Council has tentatively allocated land within the Lansdown precinct for the … battery factory.”