Watchdog demanded documents from Magnis

The Office of Enforcements demanded batteries player Magnis Energy hand over documents although the company has since said it is not under investigation.

Magnis executive chairman Frank Poullas, above, has said that no company director was involved in a share-trading group discussing Magnis shares. Picture: Britta Campion / The Australian

The corporate regulator’s Office of Enforcements demanded next-generation batteries player Magnis Energy hand over documents including internal accounts in mid-September – although the company has since told the ASX it is not under investigation.

Documents obtained by The Australian through a freedom of information request shows an Australian Securities & Investments Commission official wrote to Magnis on September 15 requesting the production of documents.

It took Magnis until October 13 to produce the documents, emails sent in response to the ­request – by company secretary Julian Rockett – indicate.

“Apologies but the Covid situation and long weened (sic) has impacted our ability to deliver the documents by the revised time,” Mr Rockett, once the company secretary at failed ASX-listed delivery platform GetSwift, wrote to regulators on October 6.

The request for Magnis to produce documents came one day after The Australian’s initial report into the batteries company that raised questions about the veracity of some of the $900m in contracts that had been signed.

The report also raised queries about the disclosure of the terms of a $US63m loan, which the company later clarified had also required a fee – in the form of shares – be paid to the lender.

Magnis’s share price has risen more than 62 per cent in the last six months, with the company telling investors that its subsidiary, Imperium3, was nearing completion of a hi-tech battery factory in New York. Shares rose 7 per cent to 47c on Tuesday.

Sources close to Magnis board discussions told The Australian that the request for documents was partly related to a period of between March and July 2020.

During that period, Magnis increased its ownership stake of the proposed New York battery factory when it purchased shares owned by former Macquarie executive Bill Moss’s Boston Energy and Innovations.

The Australian has previously reported that ASIC is investigating the irregular trading of the company’s shares.

The corporate regulator has now more than 174 documents related to its inquiries into a share-trading Telegram group and so-called “pump-and-dump” activity on file.

Magnis executive chairman Frank Poullas has previously said that no company director was involved in the Telegram group discussing Magnis shares.

ASIC officials entered at least one group on Telegram in late October to warn its members about attempting to artificially increase the Magnis share price.

“Remember – you run the risk of a criminal record, including fines and prison time by being involved in pump-and-dump campaigns,” the regulator warned.

On November 17, in response to The Australian’s report that ASIC was investigating Mr Poullas, the company told the ASX it was “not under investigation”.

“The media article repeats previously published speculation concerning trading in the company’s shares and inquiries undertaken by ASIC in relation to some trading in those shares,” the statement reads. “The company is not aware of any materials which would indicate that the company is or is likely to be under any form of investigation.”

A Magnis spokesman did not respond to a request for comment on Tuesday.

Mr Poullas has previously played down reports that the corporate regulator was making inquiries about the company.

“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,” Mr Poullas told investors at Magnis’s recent general meeting.

Several former company officials have also been contacted by ASIC, calling on them to disclose information. Those officials, who spoke to The Australian on condition of anonymity because of the sensitive nature of inquiries, said the questions related to their experience of Mr Poullas’s conduct during their time at Magnis.

Magnis has repeatedly been queried by the ASX, including in October when the company was forced to respond to questions about the size of contracts signed with Sukh Energy, one client.

The Australian had reported that financial reports showed the Magnis customer had few assets and little revenue. That is despite Magnis claiming Sukh had signed a deal projected to provide $US243m by 2026.

Despite providing no detail, Magnis claimed in its response to ASX queries that the Imperium3 business in New York would have yearly revenues of $80m in 2022, rising to $1.8bn in 2027.

The ASX also queried a Magnis announcement in July, when it warned the company directors about “ramping” announcements, which include updates “worded in an exuberant fashion but which on closer examination contains little in the way of substance”.