Magnis chair sent price-sensitive information

Frank Poullas, chairman of ASX-listed electric batteries player Magnis Energy, sent sensitive market information to a major investor.

Magnis Energy chairman Frank Poullas near his offices in Sydney. Picture: Britta Campion / The Australian

Frank Poullas, chairman of ASX-listed electric batteries player Magnis Energy, sent sensitive market information to a major investor and urged him to buy in “at considerably lower ­prices” to a proposed share placement.

The May 2019 email was not met favourably by its recipient, AL Capital executive Wayne Mo.

Mr Mo told The Australian he had not sought the information and “we will never act off the market information”. He said: “I did receive that email and it had market-sensitive information, and we told Frank we had no intention to act that way.”

The email is the latest piece of correspondence and confidential internal documentation obtained by The Australian as part of its investigation into Magnis.

The company, which controls a New York-based EV manufacturing project and a graphite mining venture in Tanzania, has enjoyed significant investor support in recent months – its share price has risen 166 per cent this year.

But Magnis has also been embroiled in scandal as high-profile former directors and senior executives leave, and with the corporate regulator querying irregular share trading activity.

Mr Poullas’s message to Mr Mo was sent as the company ­negotiated a $US30m deal with China Light and Power. Mr Poullas and consultant Richard Petty had courted CLP as part of an investor roadshow that year.

In his email, Mr Poullas wrote: “Richard met with the CLP MD and a director and in principle they are in at A$0.30.”

“My thoughts are that AL Capital can increase their stake now on market at considerably lower prices to the placement and by the end of this week we can close the placement … there’s a great opportunity now to pick up decent volumes below 25c,” the note continued.

Mr Poullas wrote to Mr Mo again in June to tell him the deal was off. “Quick update on the email below, the potential placement with CLP hasn’t eventuated and isn’t proceeding,” he said.

AL Capital is the investment arm of property developer Aqualand, a company backed by Chinese billionaire Yi Ling.

Former Macquarie executive Warwick Smith, who briefly sat on the Magnis board, is chairman of Aqualand.

This week, Mr Smith told The Australian he had left the Magnis board after just one year partly because he had been told that the company was in contact with Hakan Arif, an alleged drug smuggler wanted by Australian authorities since March 2018.

Despite Mr Smith’s concerns about Arif – and those of other executives and directors – Magnis has denied paying or engaging the alleged drug smuggler.

The Australian is not suggesting Mr Poullas is involved in criminal activity, only that senior employees raised concerns over the role Arif was playing at ­Magnis.

Mr Smith also said there had been “issues with the chairman we couldn’t get to the bottom of”.

Magnis shares, at the time of the correspondence, were in a period of decline, falling from 35c in February 2019 to 8c in December. AL Capital had taken a near 5 per cent stake in Magnis for $11.1m in September 2018.

Neither a Magnis spokesman or Mr Poullas responded to requests for comment on Tuesday.

A spokesman for the Australian Securities & Investments Commission said he was “not able to confirm anything other than the fact that our investigations are ongoing”.

“Therefore, we are not able to confirm nor deny any details, much less discuss them,” he said.

Mr Poullas told investors at an annual meeting this month: “I am aware that ASIC has ­required the production of documents from a number of sources relating to some share trades which have not been identified except by reference to a range of dates in the first half of 2020.”

Despite regulator interest, including warnings from ASIC officials that traders attempting to artificially inflate the share price could face criminal penalties, Magnis’s market value has risen 80 per cent in six months.

When the New York plant is complete next year, Magnis’s Imperium3 subsidiary expects to have revenues of $80m. These revenues, Magnis said in October, will grow to $360m in 2023 – and to $1.8bn by 2027.