Firepower International
Encyclopedia
Firepower International was advertised as a Hong Kong
-based company owned and operated by Global Fuel Technologies Ltd, specializing in technology purporting to reduce the fuel consumption and environmental impact of petrol-operated vehicles. There were other offices in Sydney
, China
, Rhodes
, Athens
and Papua New Guinea
, according to the now-defunct official company website. But "in reality it was a handful of people in an industrial estate in Perth
", Western Australia
, who were conducting a complex of fraudulent operations. The original entity—Firepower Operations Pty Ltd—was a $1 company, first registered in December 2004, owned by Firepower Holdings Group Ltd, a company with an address in the British Virgin Islands.
Through connections created with gullible Australian federal ministers, trade officials and their networks, the governments of Britain, Russia, Romania and many others were persuaded to believe Firepower offered important solutions to global warming
and the peak oil
energy crisis. However, after questions were raised about the efficacy of the 'Firepower Pill' and related products in reducing engine fuel consumption, the Firepower organisation's principal, Timothy Francis (Tim) Johnston, was claimed by media critics to have perpetrated a large-scale confidence trick
or scam, the subject of investigation by the Australian Securities and Investments Commission
(ASIC). In July 2011, ASIC banned Johnston from managing any company for twenty years.
and carbon-dioxide emissions are lowered. Inserted into a vehicle's fuel tank, a single Firepower Pill was advertised as being able to treat up to 60 litres of petrol. (Elsewhere, a larger pill was advertised, claimed to be able to treat 200 litres of petrol or diesel).
, Les Stein and financial adviser Quentin Ward who is believed to have sold more than AU$40 million of the shares in Perth. Anderson's company Owston Nominees was alleged to have been issued 40 million one-cent shares in Firepower's Virgin Islands
-based parent company Firepower BVI in June 2005, which were onsold for up to 50c a share. In March 2010, it was reported that former Labor government minister Gordon Hill, facing a AU$5 million lawsuit, had declared bankruptcy. (Refer also to ASIC court outcomes below.)
The Firepower Pill was tested for effectiveness by the former Western Australia
n Department of Consumer and Employment Protection. The investigation "raised some real concerns about the validity of claims ... that Firepower made [on the packaging] in support of the fuel saving and emission reducing properties of the Firepower Pill". In light of this, the department ordered that the Firepower Pill be withdrawn from sale in Western Australia, together with other purported fuel-saving devices whose advertised claims were not substantiated.
In response, Firepower claimed many notable organizations used its product - including the Australian and New Zealand
military forces, and a V8 supercars team, despite the fact that no fuel-additives are allowed in V8 Supercar regulations. The claims were denied by those named. Firepower also claimed to its shareholders that it was taking part in joint ventures with Shell
and General Motors
—claims that both companies have refuted.
became involved in the scam in a number of ways—through defence-force agencies and personnel, through the export agency Austrade and directly through successful lobbying of federal minister for science Julie Bishop
and John Howard himself. Johnston reportedly promised significant donations to the Liberal Party, and an attempt was made to secure a funding grant from the government's AU$500-million Low Emission Technology Demonstration Fund. A related Firepower entity, TPS Firepower, received almost AU$400,000 in export grants from the government.
. In May 2009, Allen & Unwin
published Ryle's book Firepower: The most spectacular fraud in Australian history which revealed both the fraud's magnitude and the unwitting participation of Australian government agencies and personages, including the then prime minister, John Howard.
A July 2008 ABC Four Corners analysis, 'Liar Liar, Pants on Fire', also presented details of the company's history through interviews with former managers and staff, covering sporting sponsorships and misrepresentation of products and securities.
The former Sydney Kings
, an Australian basketball franchise part-owned by Tim Johnston, ceased to exist because of the collapse of Firepower. Kings players were owed large sums in unpaid wages and superannuation.—a figure quoted at AU$265,073
The Perth-based rugby union
team Western Force
was promised millions of dollars in funding which failed to materialise, causing loss of contracted players, notably Matt Giteau
.
In 2006, the rugby league
team South Sydney Rabbitohs
was bought by business partners Russell Crowe
and Peter Holmes à Court
. On 5 November that year, Russell Crowe appeared on The Tonight Show with Jay Leno and announced that Firepower was sponsoring South Sydney Rabbitohs for AU$3 million over three years. Crowe showed viewers a Rabbitohs jersey with Firepower's name on it. In a press release, Peter Holmes à Court announced
newspaper announced that "Thousands of internal Firepower documents have been discovered in a computer abandoned by the disgraced fuel technology firm before its multi-million-dollar collapse in 2007". The computer, believed to have been the internet server for all the computers in Firepower's Perth office, had no hard drive but contained 3 SCSI
interface storage devices which had captured "thousands of emails and other documents including being sent to and from Tim Johnston, his executives and office staff". It was one of five hardware items purchased at auction for AU$40 by local internet cafe
owner Mr Henk Beugelaar.
The documents included:
mansion. Johnston surrendered two passports but failed to make the court appearance, citing a heart condition and fears for his personal safety. The hearing was adjourned and arrangements made for him to appear by video link from Queensland.
It has also been alleged that Johnston sought to rehabilitate his reputation while in England, and facilitate continuing fraudulent actions, by use of a purported letter from ASIC which declared: "Our findings based on credible and confidential information obtained by this office, Indicates (sic) that you have acted appropriately and in accordance with the Corporate Guideline Act and therefore this office no longer finds you a person of interest in this matter." But an ASIC spokeswoman disclaimed the existence of a "Corporate Guideline Act".
On the 8th of December 2009 Johnston faced the Federal Court in Perth and was examined by the liquidator, Bryan Hughes. On his way into the court room he was served with legal documents and a summons before proceedings even started. He was examined in detail over various financial transactions, including family travel payments and transactions surrounding the purchase of his Mosman Park mansion and claimed that he was forced to buy the property by his close friend and occasional antagonist Warren Anderson. In earlier evidence he claimed that Anderson forced him to pay AU$4 million into Anderson's family company, Owston Nominees, then received a loan from Owston Nominees the following day to the value of AU$5.8 million to allow the purchase of the property.
Johnston was accompanied later in the day by his wife Sandra and two daughters Madelaine and Emily. Sandra Johnston had fled to Bali after the seizure of Johnston's passports, concerned at her own potential liability due to her position as a company director between 2005 and 2008. She stayed in the Nusa Dua Asmara cliffside villa built by Gordon Hill when he was a director of Firepower, and purchased with Firepower funds. Whilst at the villa she was allegedly intimidated by tattooed men and mystery packages. Johnston told the court that he was personally threatened by Mr Anderson, who had used "particular people" to intimidate him.
The report added that other dealers were expected to be targeted, including the private companies of property tycoon Warren Anderson
and Sydney lawyer Les Stein, both of whom were heavily involved in Firepower. IMF managing director Hugh McLernon said "We will probably look at recovering about $40 million but I would be thinking that we would be battling to do much more than that."
On 17 September 2010, IMF lodged a second WA Supreme Court writ on behalf of 242 Firepower investors seeking more than AU$5 million from Les and Miriam Stein and their family company Sattvic; up to AU$26 million from Fremantle lawyers Matthew Morgan and Stefan Alteruthemeyer and their company Maclma; and about AU$8 million from the National Australia Bank
. A press report cited IMF's investment manager Paul Rainford as planning a third action against a Singapore company with the goal of recovering a total of AU$60 million through the three lawsuits. IMF had decided not to pursue either Tim Johnston or Warren Anderson because of their likely financial incapacity.
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
-based company owned and operated by Global Fuel Technologies Ltd, specializing in technology purporting to reduce the fuel consumption and environmental impact of petrol-operated vehicles. There were other offices in Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...
, China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
, Rhodes
Rhodes
Rhodes is an island in Greece, located in the eastern Aegean Sea. It is the largest of the Dodecanese islands in terms of both land area and population, with a population of 117,007, and also the island group's historical capital. Administratively the island forms a separate municipality within...
, Athens
Athens
Athens , is the capital and largest city of Greece. Athens dominates the Attica region and is one of the world's oldest cities, as its recorded history spans around 3,400 years. Classical Athens was a powerful city-state...
and Papua New Guinea
Papua New Guinea
Papua New Guinea , officially the Independent State of Papua New Guinea, is a country in Oceania, occupying the eastern half of the island of New Guinea and numerous offshore islands...
, according to the now-defunct official company website. But "in reality it was a handful of people in an industrial estate in Perth
Perth, Western Australia
Perth is the capital and largest city of the Australian state of Western Australia and the fourth most populous city in Australia. The Perth metropolitan area has an estimated population of almost 1,700,000....
", Western Australia
Western Australia
Western Australia is a state of Australia, occupying the entire western third of the Australian continent. It is bounded by the Indian Ocean to the north and west, the Great Australian Bight and Indian Ocean to the south, the Northern Territory to the north-east and South Australia to the south-east...
, who were conducting a complex of fraudulent operations. The original entity—Firepower Operations Pty Ltd—was a $1 company, first registered in December 2004, owned by Firepower Holdings Group Ltd, a company with an address in the British Virgin Islands.
Through connections created with gullible Australian federal ministers, trade officials and their networks, the governments of Britain, Russia, Romania and many others were persuaded to believe Firepower offered important solutions to global warming
Global warming
Global warming refers to the rising average temperature of Earth's atmosphere and oceans and its projected continuation. In the last 100 years, Earth's average surface temperature increased by about with about two thirds of the increase occurring over just the last three decades...
and the peak oil
Peak oil
Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This concept is based on the observed production rates of individual oil wells, projected reserves and the combined production rate of a field...
energy crisis. However, after questions were raised about the efficacy of the 'Firepower Pill' and related products in reducing engine fuel consumption, the Firepower organisation's principal, Timothy Francis (Tim) Johnston, was claimed by media critics to have perpetrated a large-scale confidence trick
Confidence trick
A confidence trick is an attempt to defraud a person or group by gaining their confidence. A confidence artist is an individual working alone or in concert with others who exploits characteristics of the human psyche such as dishonesty and honesty, vanity, compassion, credulity, irresponsibility,...
or scam, the subject of investigation by the Australian Securities and Investments Commission
Australian Securities and Investments Commission
The Australian Securities & Investments Commission is an independent Australian government body that acts as Australia's corporate regulator...
(ASIC). In July 2011, ASIC banned Johnston from managing any company for twenty years.
'Firepower Pill'
Firepower International's main product was the Firepower Pill, advertised as being able to "lower fuel consumption, reduce emissions, [and] clean and maintain your engine". The product was claimed to work by "burning more of the heavier elements of your fuel, increasing power and fuel economy", and because more of the fuel is consumed in the combustion process, hydrocarbonHydrocarbon
In organic chemistry, a hydrocarbon is an organic compound consisting entirely of hydrogen and carbon. Hydrocarbons from which one hydrogen atom has been removed are functional groups, called hydrocarbyls....
and carbon-dioxide emissions are lowered. Inserted into a vehicle's fuel tank, a single Firepower Pill was advertised as being able to treat up to 60 litres of petrol. (Elsewhere, a larger pill was advertised, claimed to be able to treat 200 litres of petrol or diesel).
Controversy
After an abortive plan (aided by the Australian government in October 2006) to establish headquarters in Switzerland, the group's founder and chief executive, Mr Tim Johnston, moved to London where his whereabouts were concealed for almost two years until he was located in London by The Australian newspaper.Corporate charges
In 2007, Firepower came under investigation by The Australian Securities and Investments Commission (ASIC) over raising "$60 million without adequate financial disclosures to investors". ASIC has sought court orders to have Mr Johnston, who left New Zealand in controversial circumstances in the mid-'90s, banned from operating companies in Australia. On 21 July 2008, ASIC also filed an action in the Federal Court against companies associated with Gordon Hill, Warren AndersonWarren Anderson (businessman)
Warren Perry Anderson is an Australian businessman and speculative investor whose net worth in 1990 was estimated by the BRW magazine at $190 million, though the following year he was reported to have debts of $500 million. He has been a principal in major developments in Perth, Darwin and Melbourne...
, Les Stein and financial adviser Quentin Ward who is believed to have sold more than AU$40 million of the shares in Perth. Anderson's company Owston Nominees was alleged to have been issued 40 million one-cent shares in Firepower's Virgin Islands
British Virgin Islands
The Virgin Islands, often called the British Virgin Islands , is a British overseas territory and overseas territory of the European Union, located in the Caribbean to the east of Puerto Rico. The islands make up part of the Virgin Islands archipelago, the remaining islands constituting the U.S...
-based parent company Firepower BVI in June 2005, which were onsold for up to 50c a share. In March 2010, it was reported that former Labor government minister Gordon Hill, facing a AU$5 million lawsuit, had declared bankruptcy. (Refer also to ASIC court outcomes below.)
Product doubts
There were also questions over whether the 'Firepower Pill' actually worked as advertised. Commentators pointed to the refusal of Firepower to give detailed information about how the pill functioned, and similarities between the Firepower Pill and the FE-3 pill, which had been independently proven not to increase vehicle performance.The Firepower Pill was tested for effectiveness by the former Western Australia
Western Australia
Western Australia is a state of Australia, occupying the entire western third of the Australian continent. It is bounded by the Indian Ocean to the north and west, the Great Australian Bight and Indian Ocean to the south, the Northern Territory to the north-east and South Australia to the south-east...
n Department of Consumer and Employment Protection. The investigation "raised some real concerns about the validity of claims ... that Firepower made [on the packaging] in support of the fuel saving and emission reducing properties of the Firepower Pill". In light of this, the department ordered that the Firepower Pill be withdrawn from sale in Western Australia, together with other purported fuel-saving devices whose advertised claims were not substantiated.
In response, Firepower claimed many notable organizations used its product - including the Australian and New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
military forces, and a V8 supercars team, despite the fact that no fuel-additives are allowed in V8 Supercar regulations. The claims were denied by those named. Firepower also claimed to its shareholders that it was taking part in joint ventures with Shell
Royal Dutch Shell
Royal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
and General Motors
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
—claims that both companies have refuted.
Government involvement
The then Australian government of John HowardJohn Howard
John Winston Howard AC, SSI, was the 25th Prime Minister of Australia, from 11 March 1996 to 3 December 2007. He was the second-longest serving Australian Prime Minister after Sir Robert Menzies....
became involved in the scam in a number of ways—through defence-force agencies and personnel, through the export agency Austrade and directly through successful lobbying of federal minister for science Julie Bishop
Julie Bishop
Julie Isabel Bishop is an Australian politician and the current Deputy Leader of the Opposition in the Parliament of Australia. She holds this title as the deputy leader of the Liberal Party of Australia. She is the party's first female Deputy Leader and the third woman in Australian history to...
and John Howard himself. Johnston reportedly promised significant donations to the Liberal Party, and an attempt was made to secure a funding grant from the government's AU$500-million Low Emission Technology Demonstration Fund. A related Firepower entity, TPS Firepower, received almost AU$400,000 in export grants from the government.
The fraud could not have continued for so long, or become so large, had it not been for the crucial intervention of Austrade. Somebody at the trade commission, probably someone junior, failed to make a rudimentary verification of any of the grandiose claims Johnston was making. Austrade took on Firepower as a client, and opened doors to contacts around the world through Australian embassies.
Over time, Firepower received $394,000 in grants under the Export Market Development Grants scheme. A senior Austrade manager, John Finnin, was recruited by Johnston as his chief executive. The senior trade commissioner at the Australian Embassy in Moscow, Gregory Klumov, was recruited to run Firepower's Russian operation. For years, Johnston was able to wrap himself in the credibility of government patronage.
Exposé
Much of the critical inquiry into Firepower was instigated and pursued by the Sydney Morning Heralds senior investigative journalist Gerard RyleGerard Ryle
Gerard Ryle is an Australian investigative reporter who is internationally recognised for work on subjects including politics, financial and medical scandals and police corruption. He emigrated from his native Ireland in 1988 and has worked for the Fairfax newspapers The Age and the Sydney Morning...
. In May 2009, Allen & Unwin
Allen & Unwin
Allen & Unwin, formerly a major British publishing house, is now an independent book publisher and distributor based in Australia. The Australian directors have been the sole owners of the Allen & Unwin name since effecting a management buy out at the time the UK parent company, Unwin Hyman, was...
published Ryle's book Firepower: The most spectacular fraud in Australian history which revealed both the fraud's magnitude and the unwitting participation of Australian government agencies and personages, including the then prime minister, John Howard.
A July 2008 ABC Four Corners analysis, 'Liar Liar, Pants on Fire', also presented details of the company's history through interviews with former managers and staff, covering sporting sponsorships and misrepresentation of products and securities.
Sporting sponsorship
At its height, Firepower was one of Australia's biggest sporting sponsors. Under the company's mounting debts, commitments were reneged upon, leaving sporting teams struggling with financial pressures.The former Sydney Kings
Sydney Kings
The Sydney Kings are a professional basketball team competing in the Australasian National Basketball League. They are the only team to date to win three consecutive championships in the NBL and currently sit third behind the Adelaide 36ers and Melbourne Tigers two away from the record five wins...
, an Australian basketball franchise part-owned by Tim Johnston, ceased to exist because of the collapse of Firepower. Kings players were owed large sums in unpaid wages and superannuation.—a figure quoted at AU$265,073
The Perth-based rugby union
Rugby union
Rugby union, often simply referred to as rugby, is a full contact team sport which originated in England in the early 19th century. One of the two codes of rugby football, it is based on running with the ball in hand...
team Western Force
Western Force
Western Force is a rugby union team based in Perth, Western Australia playing in the international Super Rugby competition. They first competed in the 2006 season and finished with the wooden spoon in that year, however their performances greatly improved in 2007. In 2008 they finished in 8th...
was promised millions of dollars in funding which failed to materialise, causing loss of contracted players, notably Matt Giteau
Matt Giteau
Matthew Giteau is an Australian rugby union footballer, a former international who now plays for the French Top 14 side Toulon. He attended St Edmund's College, Canberra, which has produced other Wallabies including George Gregan, Matt Henjak and the former rugby league star and now coach Ricky...
.
In 2006, the rugby league
National Rugby League
The National Rugby League is the top league of professional rugby league football clubs in Australasia. The NRL's main competition, called the Telstra Premiership , is contested by sixteen teams, fifteen of which are based in Australia with one based in New Zealand...
team South Sydney Rabbitohs
South Sydney Rabbitohs
The South Sydney Rabbitohs are an Australian professional rugby league football team based in Redfern, a suburb of South-central Sydney, New South Wales. They participate in the National Rugby League premiership and are one of nine existing teams from the state capital...
was bought by business partners Russell Crowe
Russell Crowe
Russell Ira Crowe is a New Zealander Australian actor , film producer and musician. He came to international attention for his role as Roman General Maximus Decimus Meridius in the 2000 historical epic film Gladiator, directed by Ridley Scott, for which he won an Academy Award for Best Actor, a...
and Peter Holmes à Court
Peter Holmes à Court
Peter Holmes à Court is an Australian businessman and a joint owner of the National Rugby League team South Sydney Rabbitohs together with Russell Crowe....
. On 5 November that year, Russell Crowe appeared on The Tonight Show with Jay Leno and announced that Firepower was sponsoring South Sydney Rabbitohs for AU$3 million over three years. Crowe showed viewers a Rabbitohs jersey with Firepower's name on it. In a press release, Peter Holmes à Court announced
"Russell and I have been particularly keen to take the club forward in a socially responsible fashion and Firepower certainly fulfils that criteria. Firepower is an Australian success story—operating in over 50 countries globally and currently expanding rapidly into new markets. Firepower is an emerging brand that is already a global leader in its category. "
Damning documents found on computer
On 28 February 2009, The West AustralianThe West Australian
The West Australian is the only locally-edited daily newspaper published in Perth, Western Australia, and is owned by ASX-listed Seven West Media . The West is published in tabloid format, as is the state's other major newspaper, The Sunday Times, a News Limited publication...
newspaper announced that "Thousands of internal Firepower documents have been discovered in a computer abandoned by the disgraced fuel technology firm before its multi-million-dollar collapse in 2007". The computer, believed to have been the internet server for all the computers in Firepower's Perth office, had no hard drive but contained 3 SCSI
SCSI
Small Computer System Interface is a set of standards for physically connecting and transferring data between computers and peripheral devices. The SCSI standards define commands, protocols, and electrical and optical interfaces. SCSI is most commonly used for hard disks and tape drives, but it...
interface storage devices which had captured "thousands of emails and other documents including being sent to and from Tim Johnston, his executives and office staff". It was one of five hardware items purchased at auction for AU$40 by local internet cafe
Internet cafe
An Internet café or cybercafé is a place which provides internet access to the public, usually for a fee. These businesses usually provide snacks and drinks, hence the café in the name...
owner Mr Henk Beugelaar.
The documents included:
- Company cheque butts, including one recording a AU$10,000 "gift" to the President of Pakistan;
- Evidence that the Howard government was complicit in official high-level backing of Firepower products through Austrade offices;
- Evidence of the company's constant quest for connections with high-ranking government and military officials in order to get deals done, and acknowledgement that such consultants needed to be "looked after".
Federal Court action
Firepower's Australian operations were put into liquidation in early July 2008 in the Australian Federal Court, followed by the British Virgin Islands arm in late September The action was commenced by the company's own lawyers over a debt of AU$70,000 and joined by mining magnate Ross Graham, who had lent Johnston AU$25 million. The liquidator, Bryan Hughes reportedly believes the company traded while insolvent from 22 July 2007 and that "Johnson had stashed up to AU$38 millions in overseas bank accounts and was planning to use the money to build a replica company called Green Power Corporation". Firepower Operations estimated that, in July 2008, it owed more than AU$16 million to various creditors, investors, and groups it had sponsorship deals with.ASIC
Warren Anderson's company Owston Nominees No 2 was the subject of a court action launched by the Australian Securities and Investments Commission (ASIC) which claims it sold Firepower shares to small investors without giving them a prospectus, making a AU$20-million windfall. Anderson publicly urged Johnston to face his accusers. On 8 February 2011, ASIC's proceedings against Owston and other respondents were successful, the Federal Court finding that declarations and publicity orders were an appropriate form of relief for the contraventions of s727(1) of the [Corporations] Act. On 18 August 2011, ASIC succeeded in obtaining a similar determination and Federal Court orders against Sattvic Pty Ltd, the company operated by Leslie Stein.Return of Johnston to Australia
Because Johnston was never charged with fraud, ASIC lacked the necessary criminal-law basis for pursuit of his extradition to face charges in Australia. He simply had to stay out of the country to avoid facing shareholders. However, on Monday 2 November 2009, Tim Johnston openly returned to Australia, reportedly to see family members. On 5 November, he was ordered by the Federal Court not to leave the country, to surrender passports and to appear in a Perth court on 26 November. The injunction was served on Johnston at his Gold CoastGold Coast, Queensland
Gold Coast is a coastal city of Australia located in South East Queensland, 94km south of the state capital Brisbane. With a population approximately 540,000 in 2010, it is the second most populous city in the state, the sixth most populous city in the country, and also the most populous...
mansion. Johnston surrendered two passports but failed to make the court appearance, citing a heart condition and fears for his personal safety. The hearing was adjourned and arrangements made for him to appear by video link from Queensland.
It has also been alleged that Johnston sought to rehabilitate his reputation while in England, and facilitate continuing fraudulent actions, by use of a purported letter from ASIC which declared: "Our findings based on credible and confidential information obtained by this office, Indicates (sic) that you have acted appropriately and in accordance with the Corporate Guideline Act and therefore this office no longer finds you a person of interest in this matter." But an ASIC spokeswoman disclaimed the existence of a "Corporate Guideline Act".
On the 8th of December 2009 Johnston faced the Federal Court in Perth and was examined by the liquidator, Bryan Hughes. On his way into the court room he was served with legal documents and a summons before proceedings even started. He was examined in detail over various financial transactions, including family travel payments and transactions surrounding the purchase of his Mosman Park mansion and claimed that he was forced to buy the property by his close friend and occasional antagonist Warren Anderson. In earlier evidence he claimed that Anderson forced him to pay AU$4 million into Anderson's family company, Owston Nominees, then received a loan from Owston Nominees the following day to the value of AU$5.8 million to allow the purchase of the property.
Johnston was accompanied later in the day by his wife Sandra and two daughters Madelaine and Emily. Sandra Johnston had fled to Bali after the seizure of Johnston's passports, concerned at her own potential liability due to her position as a company director between 2005 and 2008. She stayed in the Nusa Dua Asmara cliffside villa built by Gordon Hill when he was a director of Firepower, and purchased with Firepower funds. Whilst at the villa she was allegedly intimidated by tattooed men and mystery packages. Johnston told the court that he was personally threatened by Mr Anderson, who had used "particular people" to intimidate him.
Ross Graham
In 2008, mining entrepreneur Ross Graham, obtained a Western Australian Supreme Court order for immediate payment of over A$12 m in respect of a personally guaranteed loan. Mr Graham proposed to commence bankruptcy proceedings if the amount was not paid, but acknowledged that he is unlikely to recover any of the money.IMF (Australia)
It has been estimated that Australian "mum-and-dad" investors were shorn of AU$100 million by a small number of entrepreneurial investors and professional advisors with inside contacts who purchased Firepower shares at a very low price for on-selling to others at much higher prices. On 3 June 2009, The West Australian newspaper announced that "Former WA police minister Gordon Hill has become the first target of investors trying to recover their money from the wreckage of failed fuel technology company Firepower after he was hit with a $5 million lawsuit yesterday". The Supreme Court writ was filed on behalf of 79 investors by lawyers for litigation funder IMF (Australia). Investors paid for shares in Firepower Holdings Limited (registered in the Cayman Islands) but were given shares in Firepower Holdings Group Limited (registered in the British Virgin Islands).The report added that other dealers were expected to be targeted, including the private companies of property tycoon Warren Anderson
Warren Anderson (businessman)
Warren Perry Anderson is an Australian businessman and speculative investor whose net worth in 1990 was estimated by the BRW magazine at $190 million, though the following year he was reported to have debts of $500 million. He has been a principal in major developments in Perth, Darwin and Melbourne...
and Sydney lawyer Les Stein, both of whom were heavily involved in Firepower. IMF managing director Hugh McLernon said "We will probably look at recovering about $40 million but I would be thinking that we would be battling to do much more than that."
On 17 September 2010, IMF lodged a second WA Supreme Court writ on behalf of 242 Firepower investors seeking more than AU$5 million from Les and Miriam Stein and their family company Sattvic; up to AU$26 million from Fremantle lawyers Matthew Morgan and Stefan Alteruthemeyer and their company Maclma; and about AU$8 million from the National Australia Bank
National Australia Bank
National Australia Bank is one of the four largest financial institutions in Australia in terms of market capitalisation and customers. NAB is ranked 17th largest bank in the world measured by market capitalisation...
. A press report cited IMF's investment manager Paul Rainford as planning a third action against a Singapore company with the goal of recovering a total of AU$60 million through the three lawsuits. IMF had decided not to pursue either Tim Johnston or Warren Anderson because of their likely financial incapacity.