Magnis Energy hooked up with alleged on-the-run drug boss Hakan Arif

Magnis Energy, one of the hottest electric-vehicle batteries players, engaged alleged drug-smuggling kingpin Hakan Arif to act as an agent in Turkey.

An undated photo of Magnis Energy director Peter Tsegas, left, with alleged drug smuggler Hakan Arif, in Turkey.

Magnis Energy, one of the country’s hottest electric-vehicle batteries players, engaged alleged drug-smuggling kingpin Hakan Arif to act as an agent for the company in Turkey, former senior employees claim.

Despite evading Australian authorities since March 2018 – after being arrested in Dubai alongside Michael and Fadi Ibrahim – Arif has met with Magnis director Peter Tsegas.

The company, with a market value of about $550m, controls subsidiaries planning to manufacture next-generation batteries in New York and Townsville. It also runs the Nachu graphite mining project in southern Tanzania.

Magnis – which has attracted significant investor interest, pushing its share price 179 per cent higher since the start of the year – has had several high-profile ­figures on its board, including ex-Macquarie executive and Howard-era minister Warwick Smith.

Mr Smith this week confirmed he had left the board after just one year, partly due to concern that Magnis was involved with Arif.

“Frank (Poullas, the chairman of Magnis) said there was nothing in it, nothing in it,” he said.

“Then (former Magnis director Ulrich Bez) said he was involved in some arrangement and claimed an introduction fee caught his attention. Once I was made aware of that, that was exit territory,” Mr Smith said.

Separate documents obtained by The Australian show lawyers acting for former Magnis executive Stefan Spruck wrote to company representatives in July 2019 outlining his concerns about the potential involvement of Arif in Turkish business dealings.

The letter claims Mr Spruck advised the board in December 2018 that he had discovered the company’s “contact” was Arif.

“Our client warned the board of this and the fact that the chairman seemed to have some form of arrangement in Australia with Mr Arif through a Sydney-based real estate company which already had investment in Magnis,” the letter, dated July 30 and sent by lawyers at Holman Webb, reads.

“A few hours later, he received an email from the chairman terminating his services to Magnis.

“Since that time, our client has been receiving anonymous calls telling him to ‘forget all about Magnis’, ‘we know where your family are at all times’ and that he should never try to come back to Turkey or Australia.”

Mr Spruck’s consultancy with Magnis was also terminated in December 2018, according to separate legal filings. However, that matter did not proceed.

Magnis did not respond to a request for comment. In a letter sent to Mr Spruck’s lawyers in August 2019, the company’s legal counsel said the allegations were “false” and “defamatory in nature”.

“We will not be responding to these demonstrably false allegations,” David Mullan, of Mulan Law, wrote. “If your client continues to make these allegations publicly we will investigate pursuing legal action.”

Magnis Energy chairman Frank Poullas. Picture: Hollie Adams

Mr Bez, a former executive at Aston Martin, resigned in February 2019. Mr Smith left Magnis in December 2019. “There were other issues as well,” Mr Smith said. “There were issues with the chairman we couldn’t get to the bottom of. I was there as a representative of some Chinese interests. We felt that it wasn’t going to be good so then we left.”

Mr Tsegas, who remains on the Magnis board, this week said he had met Arif only once.

“I don’t know who he is, I met him once … I know a lot of Turkish people, I do a lot of work with the Turkish embassy,” he said.

Arif was named in Dubai court documents as the leader of a drug-smuggling ring allegedly attempting to ship hundreds of millions of dollars in cocaine, ecstasy and methamphetamine to Australia, and is considered a priority target by the Australian Criminal Intelligence Commission. He has long believed to be in Turkey.

Mr Poullas, the chairman, has declined to respond to repeated requests for comment.

Earlier this month, an unidentified woman at his home described The Australian as the “scum of the Earth” before threatening to call police.

The Australian is not suggesting that Mr Poullas or Mr Tsegas are involved in criminal activity. It is unclear who at Magnis had initially engaged Arif. In 2017, Magnis signed an agreement to sell graphite from the Nachu mine to a Turkish company.

When complete, a manufacturing plant run by Magnis’ subsidiary Imperium3 New York is expected to produce hi-tech EV batteries that will charge faster than its competitors.

The company told the ASX earlier this year that it was expecting revenues from Imperium3 to reach $80m in 2022 before rising to $1.8bn by 2027.

But, as The Australian reported on November 16, the Australian Securities & Investments Commission has opened a file on Mr Poullas. The corporate regulator has not outlined its queries, but requested assistance from the federal police to seize documents.

Magnis was last week forced to retract a claim made during an investor presentation that it could be worth up to $10bn. In a statement, it said investors “should not rely on that information as the basis for any investment decisions”. That view had been formed “following consultations with the ASX”.