Magnis, the drug kingpin and the Turkish connection

Intelligence agencies were so concerned about Magnis’s connections with underworld figure Hakan Arif that they briefed ASIC as the corporate cop stepped up its probe into the battery and graphite company.

Pictured left to right: Peter Tsegas, Hakan Arif and Frank Poullas.

A rising star of Australia’s clean, green, tech scene, at its peak Magnis Energy Technologies was worth more than $700m and a favourite smallcap of traders in some of Australia’s biggest investment firms.

But the tumbling fortunes of Magnis, now worth $40m and suspended from trade and facing charges from the corporate regulator, leave shareholders wondering what happened to their millions and how funds were splashed on trips to Turkey in the company of wanted drug lords.

The Australian can reveal Magnis’s 2018 foray into Istanbul has proven an area of interest for Australia’s intelligence agencies, keen to crack the company’s connection to Hakan Arif, a kingpin of the Anom encrypted phone criminal syndicate, and a coterie of other characters.

Document searches reveal the corporate regulator, in hot pursuit of Magnis over alleged lies to shareholders over a battery “gigafactory” in New York, received a highly confidential intelligence brief from a criminal investigative agency detailing concerns over Magnis’s connections with Arif.

Sources have suggested Magnis’s dealings with Arif and a group of his allegedly criminal syndicate, many of whom are now in jail in Turkey, hint at possible concerning connections for the firm with Sydney organised crime groups, some of whom were key to the company’s hook-up with Arif, who was on the run from Australian and Dubai police when they met in 2018.

As previously revealed in The Australian, Magnis made contact with on-the-run drug boss Arif as the company sought to negotiate deals with the Turkish government to build a battery factory.

Arif, a former member of the Comanchero outlaw bikie gang also known as “Mr Billionaire”, was arrested in Turkey in November 2023 after escaping Dubai five years earlier, captured as part of a $1bn drug bust.

The company had told shareholders it had no relationship with Arif, branding allegations he was involved “in some sort of arrangement” as false.

However, The Australian can reveal Magnis closely worked with Arif to meet members of the Turkish government, the telecommunications sector, and university staff in a 2018 roadshow.

As part of these meetings Magnis chair Frank Poullas, who travelled to Turkey alongside other staff, met Arif and his business partner who both ran a “consulting” firm, connecting clients with high-ranking Turkish government and business figures.

These meetings came as Magnis, once a darling of ASX investors and valued at more than $700m, sought to drum up investor interest in its vision of a global network of battery factories backed by a major graphite mine boasting a board of former politicians, businessmen and the Nobel prize-winner for inventing lithium batteries.

This vision has since soured. Magnis shares have been suspended from trade since December 2023, with the corporate regulator turning the screws on the company in the Federal Court over alleged disclosure failures.

The Australian Securities and Investments Commission alleges Magnis repeatedly misled investors, withholding damaging revelations that its battery factory was a disaster.

Magnis has previously sought to deny any connection to Arif, telling investors in November 2021 that The Australian’s reporting was “false”.

This came soon after Magnis told investors it was “not under investigation by ASIC” alleging media reporting of a “number of unsubstantiated statements”.

At this time Magnis was under investigation by ASIC.

Sources with direct knowledge of Magnis’s meetings in Turkey said Arif warned Mr Poullas and others that he could not be seen by members of the Turkish government, given his wanted status.

‘What we need’

Messages sent by Arif in a WhatsApp group chat with multiple staff members shows Arif telling others that Charge CCCV boss Shailesh Upreti, who developed much of the battery technology used in Magnis’s proposed battery factories, was “not needed cause the government does (not) have any one (sic) that will understand the technology fully”.

“Basically Turkey is giving us what we need but will discuss which partners and what investment and known how will be contributed,” Arif told Magnis staff.

Magnis had been seeking to lock down a commitment from Turkish backers to build a 15 gigawatt battery factory in the country as part of the ASX-listed graphite and energy company’s goal to build a global network of manufacturing sites.

Plans to build a German battery factory were floated when Magnis signed a memorandum with battery consortium TerraE in August 2017, with plans to commence production two years later.

Magnis inked a deal to supply graphite to World Plastik ve Petrokimya Sanayi ve Ticaret, the Turkish arm of Istanbul-headquartered global energy and commodities operation World Group, in 2017 as it explored plans to build a factory in the country.

This deal came soon after a visit to Turkey by Magnis director Peter Tsegas, who manages the company’s Tanzanian assets, with pictures showing the Greek-Australian businessman enjoying wine and dinner with Arif in Istanbul.

Mr Tsegas has previously told The Australian he dined with the convicted drug boss.

“I know a lot of Turkish people,” he said.

However, Mr Tsegas has since complained over suggestions he was linked to Arif.

Magnis Energy director Peter Tsegas, left, dining with Hakan Arif in Istanbul, Turkey.

Magnis’s former chief executive Frank Houllis previously told The Australian he went on the Turkey trip and met Arif, but noted the drug lord “didn’t go by the name of Hakan”.

However, sources indicated Mr Poullas was well aware of Arif, with messages sent by the Magnis chair in December 2018 referring to the drug lord by name.

“Hakan and Erdan have asked for Frank Houllis and I to attend,” Mr Poullas said in the WhatsApp chat.

The Australian has previously reported Mr Poullas said Arif “has it all worked out” as he sought to dictate the terms of a prospective battery factory agreement.

Encrypted BlackBerry

These sources indicated that Arif told Poullas and others about encrypted BlackBerry phones he and his business partner, a former member of the Turkish army, were selling to other criminal groups.

Arif and his criminal connections reportedly parsed their connections to the Turkish telco sector into accessing the encrypted phones.

These phones were sold through the Canada-based global criminal network Phantom Secure, which sold high-level drug traffickers and criminal organisations the encrypted highly secure phones.

Some 20,000 phones are thought to have been sold, triggering the global Anom sting operation in 2021, which resulted in the arrest more than 800 criminals across 16 countries, including Arif and his associate Hayan Ayik.

Arif and Ayik were among Australia’s most wanted over their connections with the country’s criminal underbelly.

This came after Arif was arrested in a significant drug sting in Dubai in 2017 alongside Michael and Fadi Ibrahim and 16 others.

Michael Ibrahim was sentenced to 25 years in jail over the scheme in which he imported 1797kg of MDMA, 136kg of cocaine and 15kg of ice into Australia between 2016 and 2017.

Police also allege they discovered $740,000 and 15 million illegal cigarettes in the raids.

The men allegedly used encrypted BlackBerry devices to plan the massive drug importation scheme.

 

Magnis, which told shareholders it had retained “Queens counsel” in a bid to take action against The Australian when its links to Arif were first revealed, has inked several deals out of the Middle East.

Documents obtained by The Australian show ASIC questioned Magnis over its connections with Dubai-based financiers Negma Group who handed the company at least $8m, with the option to top up with a further $4m, for shares in the company in September 2019.

The Negma Group, which describes itself as a “leading investment company”, did not respond to requests for comment.

Arif, who was released on bail after the raids in 2017, escaped Dubai in March 2018 allegedly using a fake passport and fled to Turkey.

Magnis and Mr Poullas spent a number of days on the ground with Arif in their whirlwind trip in December 2018, including staying in an apartment provided by Arif in a town outside of Istanbul and eating a meal prepared by a housekeeper.

Sources with knowledge of Arif’s Turkish endeavours note he was connected with a real estate developer and businessman with a battery manufacturing operation.

Arif reportedly owns a number of properties around Istanbul, including a hotel and money exchange business.

He was also allegedly connected to a fight club gym which proved popular with local Turkish officials.

Sources said Arif allegedly moved drugs through a residential address, noting he had connections with a local Australian fruit import business in Sydney.

Sources indicated Magnis’s dealings with Arif were organised through shareholder backers and intermediaries for the company in Sydney who were connected to the Comanchero organised crime figure. Former shareholders report Arif being repeatedly referred to by fellow investors at Magnis’s 2019 AGM.

Big Ray’s shot to fame

Ray “Big Ray” Younan is a vocal backer of Magnis and its chair, Mr Poullas, with several members of his family holding significant shareholdings in the ASX-listed business.

Younan, who was shot in the leg by former first-grade rugby league player and organised crime figure John Elias, has contacted a number of Magnis shareholders in recent months as the company teetered on the edge of bankruptcy.

Mick Gatto is in the middle with the black t-shirt with the eagle on the front. Alex ‘Little Al’ Taouil has the green jacket. Ray Younan, in yellow at the back. Picture: Anthony Johnston

Magnis told shareholders it had just $90,000 in June, with the company staring down the looming repayment of a $4.6m loan, charged at 54 per cent a year, plus a further $704,000 in unsecured debts from shareholders.

This comes despite Magnis ceasing paying its directors last year. Shareholders allege Younan made threats in relation to Magnis, outraged they had sought to raise issues around the company and Mr Poullas. These matters were reported to NSW Police.

Younan, who previously has offered his services as a “contract negotiator” and has been hired as a debt collector by construction figures, is an associate of Mick Gatto as well as several other organised crime figures.

However, Younan denies knowledge of Magnis’s connections with Arif, telling The Australian he had never heard of the Comanchero bikie figure and was “honestly shocked” at Magnis’s previous dealings.

Younan told The Australian he had no criminal links, naming a number of high-profile business people who were his friends.

The Sydney figure, who referred to himself as BigSolidRay in emails, was a backer of disgraced surgeon Charlie Teo, repeatedly appearing outside meetings of the Health Care Complaints Commission as it considered complaints into the doctor.

Intelligence concern

Magnis has tried to mollify its critics, bringing in former NSW fraud squad detective Michael Gerondis as its governance, compliance and risk head.

But the seasoned police investigator’s attempts to unravel the mysteries around Magnis were frustrated by refusal from Mr Poullas to hand over documents or adopt compliance reforms.

Mr Gerondis was eventually pushed out of Magnis, with the company refusing to pay his final invoice, with his departure never announced to shareholders despite the company trumpeting his appointment in November 2021.

Magnis’s connections to organised crime remain of interest to law enforcement agencies, with a Freedom of Information request showing ASIC has gathered a number of documents as part of its investigation into the company detailing matters concerning Arif.

Information provided to The Australian reveals ASIC was handed an intelligence brief by one of Australia’s peak investigatory agencies in July 2019 concerning Arif.

Magnis chairman Frank Poullas pictured in Sydney. Picture: Britta Campion

This document is one of 11 held by ASIC concerning Arif, with the regulator refusing to release all internal documents.

ASIC FOI officer Haydar Tuncer said the intelligence brief “contains confidential information provided by a third party”.

Mr Tuncer said a further five documents contained information concerning ASIC’s deliberative processes, noting they mentioned Arif. These documents are understood to reflect ASIC’s consideration of material it seized from Magnis as the regulator ratcheted up its probe into the company which culminated in court action against the business and Mr Poullas in April.

Arif was arrested in Istanbul in November, with the bikie figure now in jail alongside several other organised crime figures arrested in the sweeping Operation Ironside, a global sting between law enforcement agencies.

Investigative agencies are closely watching Arif’s detention and any indication Turkish authorities may be moving to deport the criminal figure.

The Australian is aware that the Australian Criminal Intelligence Commission was concerned about Mr Poullas’s links to Arif, calling in the Magnis chair for a meeting to discuss the criminal figure. Magnis figures said Mr Poullas was “silent all the time” when asked about the ACIC interview, with several directors so concerned over the company’s links to organised crime that they resigned in protest.

Former Magnis director Ulrich Bez told The Australian he left Magnis after discovering its links with Arif. “I left Magnis when I learned that Frank P met with a convicted drug dealer as I did not want to be involved.

“I did not met Hakan A nor spoke to him.”

Other directors have said they told Mr Poullas to resign over his alleged links with the organised crime figure, however they said instead they were targeted by Magnis shareholders.

Magnis has previously threatened to sue The Australian, serving court papers on this publication alleging News Corp Australia engaged in a “consistent and persistent” attempt to paint Magnis “in as unfavourable light as possible regardless of the proprietary or substantive accuracy of such articles”. The company’s then-lawyer John Barbouttis alleged News Corp engaged in a “conspiracy to injure Magnis”.

Magnis never filed its claims and the company did not pay Mr Barbouttis.

Mr Poullas, who privately has railed against coverage of Magnis in The Australian, failed to respond to detailed questions.