Questions over battery contracts struck by Magnis Energy-backed Imperium3

A New Delhi-based battery storage firm which purports to be a customer of Magnis Energy’s American subsidiaries has assets of less than $2000.

Magnis Energy chairman Frank Poullas. Picture: Britta Campion

A New Delhi-based battery storage firm which purports to be a customer of Magnis Energy’s American subsidiaries – using technology from Imperium3 and Charge CCCV for electric vehicle recharge stations – has assets of less than $2000, according to the company’s filings with the Indian corporate regulator.

ASX-listed Magnis, which owns 63 per cent of battery manufacturer Imperium3, has not disclosed the names of five of the six companies which accounted for orders worth $US650m ($885m).

On Wednesday, Magnis confirmed Sukh Energy – which The Australian this week reported was a client with negligible assets – was one of those six customers.

Ez4Ev, an Indian energy firm that counts Imperium3’s chairman Shailesh Upreti as a “mentor”, in August said it would introduce battery technology from Imperium3 and C4V.

Mr Upreti is also the president of C4V, which is developing technology that aims to charge electric vehicles in minutes.

Ez4Ev was “introducing an innovative battery technology from C4V/iM3 New York, for initiating localisation of ‘battery energy storage systems based on their success cases in USA’,” India’s Business Today reported.

But Ez4Ev’s financial statements, dated December 2020, show no revenues and no expenses beyond “professional fees” and “audit fees” in the 12 months to March 30 that year. One of its two directors, Ayesha Singh, is studying sculpture in Chicago.

At the time, it had net assets of $1844. Ez4Ev did not respond to a request for comment.

Magnis, which has had a number of high-profile business and political figures on its board including former Macquarie executive Warwick Smith and ex-NSW deputy premier Troy Grant, did not respond to requests to clarify its relationship with Ez4Ev.

Both Mr Smith and Mr Grant left the company after less than a year on the board, while another prominent businessman, James Dack, left after 11 months.

Magnis’s major assets are its holdings in Imperium3 and C4V.

Magnis has previously said that contracts totalling $US650m announced in May were “provided to the ASX prior to the announcement being made”.

An ASX spokesman declined to provide details about its compliance activities, but noted the rules require only a “necessary quick and cursory” review to determine whether the announcement related to the company and if it is market sensitive.

“ASX does not typically comment on compliance matters. Generally speaking, companies are responsible for the accuracy of the statements they make to the market,” he said.

Magnis shares rose to 35c on Wednesday after the company announced a new $US160m contract had been signed with Omega Seiki, a manufacturer of three-wheeled vehicles.

The company noted that the “initial fulfilment” would come from the Imperium3 factory in New York, although earlier press reports noted supply would later come from local plants.

Despite Magnis describing the announcement as price sensitive, details had already been provided to the media. One day earlier, Kuldeep Gupta, C4V’s vice president of strategic partnerships, told PV Magazine the company had secured a $US163m supply contract.

Magnis also told the ASX that it could confirm “that all C4V patented cell manufacturing technology is exclusively licensed to (Imperium3), and no $US10m fee was paid to any group involved in the funding package (it signed with Riverstone Credit Partners)”.

That was in response to a series of concerns raised by The Australian about the loan and associated fees, which had previously prompted the company to issue an ASX clarification.

In April, the company told investors that Imperium3 had received a $US50m loan from Riverstone, finally giving it the funding needed to complete development of a lithium-ion “gigafactory” in upstate New York.

A week later, Magnis chairman Frank Poullas said Riverstone had separately taken a $US5m stake in C4V, a “commitment” to the project. Part of those proceeds would be used to pay back an earlier loan from Magnis.

According to filings with the Securities and Exchange Commission, Riverstone had been given two $US5m stakes – one in Imperium3 and another in C4V – “in consideration for the lenders’ entry into (the loan) agreement”.

Imperium3’s plant has suffered significant delays, with a completion date blowing out from 2019 to 2022 and production capacity being cut from 15 gigawatts to just 1.8 gigawatts per year.