The woes surrounding mystery fuel additive company and Western Force sponsor Firepower Group have deepened after one of its major backers, ET founder Ross Graham, commenced legal action to recover $20 million in loans and investments.
The woes surrounding mystery fuel additive company and Western Force sponsor Firepower Group have deepened after one of its major backers, ET founder Ross Graham, commenced legal action to recover $20 million in loans and investments.
Mr Graham disclosed today that he had attempted to negotiate a commercial settlement with Firestone founder Tim Johnston but has now taken steps to recover his debt.
As well as investing $20 million in the Firestone Group, Mr Graham said he has also invested "significantly" in a WA-based company which distributes Firepower's liquid fuel conditioner products throughout Australia and the Pacific.
Firepower built a high national profile in recent years through sponsorships of the Western Force rugby team, the Sydney Kings basketball team and the South Sydney Rabbitohs rugby leage team.
However the group's commercial activities - in particular the attributes of its fuel additives, which purportedly boost fuel efficiency - and its financial depth have remained shrouded in mystery.
Its South Sydney sponsorship has been terminated, its Sydney Kings franchise has been abolished, and there has been protracted speculation about its Force sponsorship.
An entity called Firepower International has run national advertisements this week offering to sell the distribution rights to the "Forepower Pill" in Australia.
New Zealand born Mr Graham was the founder of Redcliffe-based mining equipment supplier ET, which is also known as Executive Traders Pty Ltd and ET Underground Hire.
Like Firepower, it has also been a sponsor of rugby in WA.
A statement from Mr Graham is pasted below:
ROSS GRAHAM SEEKS TO RECOVER FIREPOWER DEBTS
Western Australian businessman Ross Graham is seeking to recover debts outstanding to the Firepower Group.
Mr Graham has lent or invested more than $20m to the Firepower Group over the last 18 months.
In mid 2007, he also invested significantly in a WA based company which distributes Firepower's liquid fuel conditioner products throughout Australia and the Pacific.
After protracted attempts to secure a complete restructure of the Firepower Group, Mr Graham has reluctantly taken steps towards recovering his debt.
Mr Graham said his rescue proposal to the Firepower Board of Directors involved a restructure that would see all equity investors retain an economic interest.
"Our intention was to appoint an independent and professional board of directors to the restructured company that would operate to the highest standards of corporate governance, especially in relation to financial transparency and credibility," Mr Graham said.
"However, the Chairman Mr Johnston declined to agree to our restructure proposal.
"Our recent investigations into the Firepower group have revealed that any such rescue proposal may have been unenforceable due to the complexity of Firepower's structure and the multiple, opaque jurisdictions where the companies are registered."
Mr Graham said that he would pursue all appropriate legal avenues to recover his debts.