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The managing director of listed bottled water producer Eneco Refresh (ASX: ERG), Henry Eng Chye Heng, has pleaded guilty to one count of market manipulation following an investigation by the corporate regulator.
Heng, who is also founder and executive chairman of the Perth-based company, has also pleaded guilty to one count of creating a false or misleading appearance of active trading.
However, Heng has not entered a plea on further charges relating to an alleged failure to notify the market of the purchase of shares in the company.
The Australian Securities and Investments Commission (ASIC) alleges that on 24 occasions between 18 December 2020 and 15 December 2021, Heng used share trading accounts held in the names of his family to manipulate the share price of Eneco.
ASIC further alleges that on 30 April 2021 and 30 November 2021, Heng used share trading accounts held in the names of his family to conduct trades that created a false or misleading appearance of active trading in Eneco.
Heng plead guilty to these charges at a hearing in the Perth Magistrates Court on 1 December and he is due to appear in Perth District Court on 2 February 2024 for sentence mention.
However, the charges relating to failure to inform the market of his change of interest in the company have been adjourned to 9 February 2024 for further mention in the Perth Magistrates Court.
Heng is facing nine counts of failing as a director to notify the ASX of a change in his relevant interests in Eneco, contrary to section 205G(10) of the Corporations Act.
ASIC alleges that between 30 December 2020 and 30 November 2021, Heng used share trading accounts held in the names of his family to conduct trades in Eneco and, being a director of Eneco, he failed to notify the ASX within 14 days of a change in his relevant interests in those securities.
In a statement to the ASX, Eneco confirmed the matters brought against Heng by ASIC.
“The board of directors takes this matter extremely seriously and wishes to reassure shareholders, employees, and stakeholders that the company remains committed to maintaining the highest standards of corporate governance and ethical conduct,” the company says.
Eneco Refresh, which supplies spring water products across Australia, eked out a $97,687 profit in FY23 after years of bottom-line losses. While the latest result was buoyed by the sale of its Darwin factory, underlying EBITDA surged to $1.2 million in FY23 following a 3.6 per cent lift in revenue to $14.48 million.
ASIC notes that the maximum penalty for each contravention of market manipulation and creating a false or misleading appearance of active trading is 15 years’ imprisonment.
Failure to notify the ASX of a change in relevant interest in a company is capped at a $6,660 fine for each count.
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