There was little fanfare last week when it was announced that Australia’s High Commissioner to Pakistan, Zorica McCarthy, was finishing her stint in the high profile post. Those who followed the Firepower saga will recognise Zorica as the diplomat who purchased Firepower shares at a discounted price from Tim Johnston, shortly after the then Prime Minister John Howard attended a Firepower “contract” signing ceremony in Pakistan that was used to promote the shares. Well, lots more about that in my book. Red faces all around. One can only suppose the episode wasn’t too good for Zorica’s reputation but of course she was cleared of any wrong-doing …
Archive for April, 2009
For those wondering if the Firepower saga is all just a Grimm’s fairytale, here is what one of the players is prepared to say about our friend Tim Johnston. Real people were hurt by this, and not just shareholders. I wouldn’t want to be Johnston if he ever returned to Perth. Some very large Wallaby players are looking for him, according to this article. You gotta ask though why people didn’t kick up a stink sooner. One player agent explained it to me last week when he called up to try to find out what was in the book. The players, he said, were just keen to get paid. That’s why they stayed right behind Firepower, as did the Western Force. Well, it is bye bye players and almost bye bye Western Force. And that is sad. The only good thing to come out of it seems to be that the players are now doing what is right for their rugby and not for just their pockets. As the player agent explained, success will bring its own rewards anyway.
Could the Western Force be the second major Australian sporting franchise wiped out by Firepower? I’m afraid it looks likely, according to a story in today’s SMH (it does not appear online). What many people do not know is that when the Force was founded back in 2005 it’s first game wasn’t until the following year. So it was able to build up a war chest of more than $10 million from sponsors to give itself a fighting chance to get off to a good start. Though the franchise didn’t set the world alight that first year, the war chest assured it had a good future … if it were not for Firepower. The mistake club officials made was to fall for Tim Johnston’s patter and then to allow Johnston to lure the likes of Matt Giteau and Drew Mitchell and others away from other franchises on the false promise of vast riches. The Force gave Johnston his credibility with the players. The players and their representatives naturally assumed the Force had done a little background checking on their new major sponsor. But it hadn’t. As I reveal in my book, all the players had to do was look at the name of the various “Firepower” companies that appeared at the top of their Firepower “contracts” and check to see if they were real companies – ie: were these companies known to the corporate regulator, ASIC? Boy, what a surprise they would have had right there and then. It needs to be emphasised that the players did nothing wrong. They are professional players with a limited earning opportunity who were simply misled by Firepower.
Interesting to see NSW Fair Trade Minister Virginia Judge expose the dangers of dodgy fuel-saving devices on television last night. But what has been kept very quiet is that her own government was one of those nearly sucked in by Firepower back in September and October 2006. As I reveal in my book, several meetings were held between Firepower representatives and the then staff of the Deputy Premier John Watkins. The plan had been to introduce Firepower’s “technology” to Sydney ferries. The whole mad plan is outlined in several documents I obtained when researching the book, including “proof” that the products worked from a scientific institution that had closed down ten years earlier (but who checks such things?). Of course, it never got anywhere. The SMH ran its first story on Firepower in January 2007 and that was the end of that. But a similar plan to use the Firepower “technology” almost went ahead at the Labor-dominated Canada Bay Council. The plan was to use it on six garbage trucks. It too was scrapped after the first SMH story came out.
I see the results of the NSW Government’s investigation into the integrity of fuel-saving devices has come back with a result. Many of these products made similar claims to Firepower (it was the fuss over Firepower that started it all). For those who still doubt, here you go. The wheels of government move slowly. But this government in particular has a little secret. What iconic Sydney institution was exploring the use of Firepower products? More tomorrow.
As I first reported in December a number of Firepower shareholders are having their claims of being ripped off quietly settled by the financial institutions that own one of the financial advisory firms that sold the dud investment. Some people are being offered up to 35 cents in the dollar as compensation and many are grateful to settle. But the shares sold through these brokers represent only about 10 per cent of what Firepower raised. The overall figure is more like $100 million when you consider the various strands of raising that went on – not all of which went to Tim Johnston, it should be stated, and some of which might be double-counted.
Others though have not been so lucky. They have made cases to various authorities, including ASIC and the Financial Services Ombudsman, and waiting for an outcome is like watching paint dry. In the meantime one of the other firms selling the shares has gone into liquidation, thus preventing authorities from imposing any penalties. The only hope for a majority of people appears to be the class action that is progressing with pace by the litigation funder IMF Australia.
The Federal Court action against those involved with Firepower is proceeding slowly. There are enough documents filed to fill a second book but the matter is still a long way from trial and there is yet no sign of Tim Johnston wanting to come back to Australia.
All of a sudden, May seems almost upon us and each passing day brings the book launch closer. I actually got a copy myself two weeks ago – supposedly hot off the press from my publisher. Others appear to have gone out to the media for review and to attempt to get the all-important publicity that can mean the difference between success and failure. So with that in mind it was nice to see a piece in today’s Daily Telegraph.