Eneco Refresh co-founder Henry Heng sentenced for market manipulation

On Friday the Perth District Court also sentenced Heng for creating a false or misleading appearance of active trading, with the executive released on recognisance for good behaviour over a period of 12 months.

In December the executive pleaded guilty to the charges, having used accounts in family members' names to manipulate the Eneco share price on 24 occasions between 18 December 2020 and 15 December 2021, and create the appearance of active trading in the stock on 30 April 2021 and 30 November 2021.

The judgment comes within a month of the Supreme Court of Western Australia sentencing former corporate adviser Cameron Kerr Waugh to two years' jail time, with possible release after nine months, for insider trading in relation to Genesis Minerals (ASX: GMD).

"ASIC welcomes the sentencing decision handed down," says Australian Securities and Investments Commission (ASIC) chair Joe Longo.

"The recent insider trading convictions and jail time for Cameron Waugh, as well as the sentencing of Mr Heng, reflect ASIC’s commitment to protecting the integrity of Australia's markets by holding market operators and participants to the highest standards."

ERG shares fell 33.33 per cent this morning to $0.008 following the news - less than a quarter of its $0.034 level around the time of his last offence of market manipulation.

Founded in 1997 and formerly known as Refresh Group under the ASX code 'RGP', in 2018 the company received an $8.2 million investment from then Dutch-owned Eneco Investment Pte Ltd to give the new investor a 51 per cent controlling stake, but in 2020 it transferred to Japanese hands when Eneco was bought out by a consortium comprising Mitsubishi and Chibu.

Eneco Refresh has water bottling operations at its home base as well as in Kalgoorlie, Sydney, Melbourne, Brisbane and Toowoomba. The business divested its Darwin factory and operations last year for a combined $4.9 million.

In addition to its water division Refresh Waters, Eneco also has its Refresh Plastics business in Melbourne where a fire broke out at its factory in February last year, ultimately leading to the write-off of almost $1 million worth of assets although the group was able to recoup funds from insurance payouts.

Despite the disruption caused, the plastics business was still able to record a 4 per cent increase in sales in the December half.

"Unfortunately, since the loss of our production capability the business is now confronted with a different operating cost model which appears to be challenging," non-executive chairman Colin Moran said in the half-yearly results.

"The team is focused on delivering a sustainable profit from this business and will continue to assess all options in this area which the group is now actively addressing," said Moran, who had been with Eneco Refresh since 2021 but was promoted to the non-executive chairmanship on the same day the group revealed the charges against Heng.

The company announced to the market in November last year that Heng was served with a prosecution notice, and he tendered his resignation within a week.

"Mr Heng was one of the original founders of the company and was instrumental in taking the company public, driving it through the many day to day challenges and building it into what Eneco is today," the listed company stated at the time.

"His contribution to the company has been of extreme value, his commitment over 26 years, his vision and dedication have played a pivotal role in shaping Eneco and preparing it for its new challenges ahead."

When Heng left, the company was being overseen by two non-executive directors as they searched for a chief operating officer (COO) to run operations - a role that was only recently been filled earlier this month by former Anchor Foods COO Christopher Conyers.

Conyers has inherited leadership of a company with accumulated losses of $9.67 million as at the end of 2023, which reported a loss of $744,000 for the December half as well as a slight rise in revenue to $7.8 million.

The company is now worth just $2.61 million. According to the company's last annual report, the Heng family had a 3.4 per cent stake in the group.