The Magnis Energy Technologies Ltd (ASX: MNS) share price has shot up this week.
The price movement comes as the financial activity of the company’s chairman continues to be investigated by the Australian Securities and Investments Commission (ASIC).
At the market close, the Magnis share price had dropped by 5.49% to 43 cents. However, it is still up 4.87% from last Friday’s closing price.
So, what’s going on with the battery manufacturer?
Magnis chairman under investigation
As reported by The Australian on Tuesday, ASIC has requested documents pertaining to the trading activity of Magnis chairman Frank Poullas.
According to The Australian, letters sent to Magnis by senior ASIC officials in September, seen by the publication, “show the corporate regulator is investigating suspected contraventions of Corporations Act provisions relating to market manipulation and the false trading of shares”.
Information tying the company with “Dubai-based financiers” has also been requested.
Further, The Australian said:
The regulator has separately warned investors who appear to be using Telegram and other messaging platforms to manipulate the Magnis share price that they face prosecution.
This comes after the company last month announced the Imperium3 lithium-ion battery plant in New York — of which Magnis is the major shareholder — was now 57% complete.
The long-delated project had been expected to start production in 2019.
Chairman’s financial activity in question
The financial activity of the chairman is also under question after a number of payments from Magnis were made to Strong Solutions — a company linked to Poullas.
The Australian said an internal report, handed to Poullas in early 2020, showed Strong Solutions was billing Magnis $4,500 a month.
The report noted Poullas was charging Magnis his consulting fee with “no independent oversight of this fee or oversight of work undertaken”.
Magnis responds to media coverage
In mid-November, Magnis entered a trading halt before responding to an article in The Australian that claimed Poullas was under investigation by ASIC.
In its response, the company said the article had “a number of unsubstantiated statements regarding the Company”.
The Magnis share price fell by more than 19% on the day of the response. Since then, two board members have also jumped ship from the company.
Magnis share price snapshot
In the last 12 months, the Magnis share price has increased by 65%. Within that time, shares dropped as low as 26 cents and shot as high as 76 cents. Its shares are down 25% this year to date.
The company has a market capitalisation of $439.42 million.