Magnis claims it was misled when telling investors about battery gigafactory’s targets

Magnis has branded reporting it failed to produce any batteries or revenues at its key gigafactory as “misleading” in a note to investors.

Magnis (US) managing director Hoshi Daruwalla (left) and Chair Frank Poullas and an unidentified woman arrive for their AGM. John Feder/The Australian

Magnis Energy Technologies claims revelations it was allegedly provided false production and revenue targets by a key ally is not a “material announcement”, ­despite revealing a standstill at its battery gigafactory after attempting to seize control of the ­operation.

In a note published on Magnis’s website, but not on the Australian Securities Exchange, Magnis claimed it wrongly told investors it was set to produce 300 cells a day in December, when in fact its plant was idle, after being given the information by a key ally.

Magnis said it told investors its battery gigafactory Imperium3 New York would churn out revenues on the back of 300 cells a day in December after being given the “conservative guidance” from the factory’s chair, Shailesh Upreti, at a November board meeting.

But a Magnis spokesman said the company did not need to disclose the information to the market as it was “not a material announcement”.

This comes after Magnis was forced to reveal to investors that iM3NY produced no cells or revenues in December, despite repeated assurances during the company’s annual general meeting in November.

Magnis said the guidance shared with investors was “forward looking numbers on production … provided by iM3NY”, which is 73 per cent-owned by the ASX-listed battery and graphite minnow.

Magnis has attempted to brand media reporting of its production and revenue flop as “misleading” after conceding it was “not the case” that there had been any activity to make or sell batteries in December.

This was despite Magnis managing director (US) Hoshi Daruwalla telling shareholders at the company’s AGM on November 30 of plans to scale production to 1000 cells a day at iM3NY in the coming months.

The Imperium3 factory in New York.

However, Magnis’s claims it was misled by iM3NY, despite ­attempting to run the factory for almost two weeks after seizing control of its leadership.

Magnis moved to seize control of iM3NY’s board, triggering a breakdown in the relationship with its key partner in the joint venture Charge CCCV, after Atlas Credit Partners warned that the battery factory was in breach of multiple covenants on a $US100m ($147m) loan.

Magnis told investors on November 15 it had appointed a third director to iM3NY as well as appointing Wade Guindy as a new chief executive, tipping out Chaitanya Sharma from the role.

Mr Daruwalla told investors the move to take control of iM3NY was a bid to “take control of our own fate”.

But Magnis was subsequently stripped of its control of iM3NY on November 30, with its ­directors Frank Poullas, Claire Bibby, and Giles Gunesekera removed and Mr Sharma reinstated as CEO, after the lenders exercised powers after finding further covenant breaches.

Mr Upreti, C4V boss, was retained as iM3NY chair.

Magnis told investors on Friday that some of the breaches “stemmed back many months prior to November 2023”.

“Magnis was not made aware of these historic breaches until November 2023,” it said in a statement signed “Magnis Team”.

“Magnis has always been prompt in releasing information to the market regarding the court order to maintain the status quo.”

Magnis declined to reveal when the first breaches were recorded by the lender, saying it was a “legal matter”.

Magnis told investors on Wednesday it had secured a court order, dated January 3, to put in place an interim order that confirmed its directors resigning from iM3NY. This came as Magnis attempted to stop a court fight with C4V, pending mediation between the two sides.

However, Magnis told shareholders C4V cancelled mediation “less than 48 hours prior” to the two sides meeting to discuss the future of their joint venture.

C4V has said iM3NY risks running out of cash by about January 15, but Magnis told investors on Wednesday that Atlas Credit Partners had extended a $US3.3m lifeline to fund working capital needs and agreed to capitalise interest owed to the $100m loan.

Magnis (US) managing director Hoshi Daruwalla (left) and Chair Frank Poullas and an unidentified woman arrive for their AGM. John Feder/The Australian

The Australian Securities and Investments Commission is currently investigating “suspected false or misleading statements and breaches of continuous disclosure obligations by Magnis”.

The new examination of Magnis, which kicked off in July 2023, comes after ASIC wrapped up an earlier probe into Mr Poullas, the company’s chair.

Mr Poullas denies all wrongdoing.