By Gerard Ryle and Jacquelin Magnay
THE Australian Securities and Investments Commission has moved against the fuel technology company Firepower in a widespread action that threatens to draw in companies associated with a prominent property developer, one of Australia's top lawyers and a former West Australian police minister.
ASIC filed a civil action in the Federal Court late yesterday against Firepower's founder, Tim Johnston, a number of companies and another individual for allegedly selling shares in his controversial fuel-pill enterprise.
They include companies associated with Johnston and with the property developer Warren Anderson, the barrister Les Stein, and the former WA police minister Gordon Hill.
Mr Stein is a former chief counsel of the Sydney Metropolitan Strategy, a chairman (chief judge) of the Town Planning Appeal Tribunal of Western Australia, and a former professor of law at the University of Western Australia.
ASIC has not joined Mr Anderson, Mr Stein or Mr Hill in the action and is not seeking any orders against them personally.
Also facing ASIC's civil action is Quentin Ward, a financial adviser and former bankrupt from Perth.
Though Firepower's products were difficult to obtain in Australia, some of the investors' money was used to transform the company into the biggest sporting sponsor in the country. The portfolio included South Sydney Rabbitohs rugby league team, Sydney Kings basketball team and Western Force rugby union team.
ASIC alleges that the individuals and companies named were involved in selling shares in Firepower to members of the public in breach of the Corporations Act. It alleges that the proper disclosure documents were not provided to investors who pumped more than $60 million into the company and that this did not allow the investors to make a proper assessment of the risks involved.
ASIC alleges that about 1400 investors bought shares in Firepower. Many bought them on the promise of a stunning sharemarket listing in London. Some expected that the shares they bought for between 5 cents and $1.33 would be worth up to $7 each when the company listed on the Alternative Investment Market, an exchange that caters to small, speculative companies.
Many of the investors were ordinary people, and some borrowed against their houses to buy the shares. But the shareholding register also reveals high-powered identities.
AFL players who invested heavily included the Brownlow medallist Mark Ricciuto, his Adelaide Crows teammates Simon Goodwin, Rhett Biglands, Jason Torney, Brett Burton and Robert Shirley, and their coach, Neil Craig. Wayne Carey, his father, Kevin, and his manager, Anthony McConville, also invested in Firepower.