28/08/2007 - 22:00

Firepower a slow burner in the west

28/08/2007 - 22:00

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Getting answers out of people isn’t always easy.

Getting answers out of people isn’t always easy.

As a journalist, I’ve come to expect that most people have something they don’t want to talk about. Whether or not that is material to what you write depends on who you are talking to and what you are writing about.

So when I rang up former Perth-based fuel-technology company and serial sports sponsor, generally known as Firepower Group, I did expect they may not care to answer some of the questions I had.

Firepower has been in the press over east quite a bit lately, with reports delving into sensitive matters such as the technology itself and the past of founder, Tim Johnston.

Since the stories seem to have been largely overlooked in the Western Australia, despite Firepower being formed in Perth and a major sponsor of local rugby side the Western Force, I thought it was high time we brought our readers up to speed.

Given the group started defamation proceedings against The Sydney Morning Herald, I figured it may have disagreed with some of those articles and may want to put its side of the story.

What I didn’t expect was to be offered an interview with Firepower’s founder Tim Johnston – on the proviso that I didn’t ask any questions on these matters that had been raised in other media, or write about them in an article.

Instead, I was being offered the story of what Firepower was doing outside Australia, notably Russia, and what the business model is.

I’ve been a business journalist for the best part of two decades and I’ve never been offered an arrangement like this.

It sounded very much like what happens in Hollywood, when those who write all that riveting entertainment news make agreements not to mention events from the past – like break-ups or drug addictions.

So I turned down this “opportunity”, pointing out that its hardly objective journalism to talk about a business model without inquiring about highly public past and current events, which are clearly related and appear important.

The stuff I wanted to clear up first was: Mr Johnston’s past business enterprises; the ownership of Firepower; the scientific evidence of Firepower’s success in any product group; and the apparent secrecy of the group’s management at the same time as it seeks profile through big sports sponsorships.

In responding to this, Firepower’s spokesman, a man to whom I’d spoken to briefly on the phone and had sent two emails that pretty much reflected the points above, took the trouble to describe me as a journalist who wasn’t interested in developing long-term relationships.

Instead, I was told, I was simply interested in writing about victims and villains.

It must be a gift to be able to work people out so quickly. I wonder how many long-term readers of this newspaper would agree with him.

So that pretty much seems to end any hope of getting a straight answer from the company on some of the many stories floating about.

My interest in the Firepower story goes back more than a year.

In April last year, a reporter at WA Business News had a tip that Firepower had been the funding catalyst for the deal that brought Wallaby star Matt Giteau to play for the Force.

Naturally, we sought to get some comment from the company.

Easier said than done. It took some considerable effort to determine the most rudimentary details about Firepower.

We did find that the group was then headquartered at Bentley’s Technology Park, the name of the founder and the fact that the holding company was registered in the Cayman Islands.

Most of the other scant information we reported, on May 4 2006, was from marketing material on the company’s web site.

It was all very unusual.

Here was a company clearly spending significant sums to put its brand all over the Force jersey and it didn’t want to talk about it.

Furthermore, it was a Perth company doing business, according to its own web site, around the globe, yet we’d never heard of it.

Finally, it was a small local company producing something and wholesaling it, yet it was owned out of the Caribbean.

Seeking information had raised more questions than answers, but we were soon overtaken on that as other media caught on to the Firepower mystery.

The company’s sponsorships of various sports – including the Sydney Kings basketball team, which Mr Johnston took control of – raised its national profile significantly.

There was also, no doubt, a bit of east coast envy. Stealing rugby’s biggest up and comer to the west, buying basketball’s most successful team, and snuggling up to the suddenly de rigueur South Sydney Rabbitohs rugby league team is a lot to take from the east coast establishment, as any Western Australian will know.

Envious or not, the intensity of the national focus started to shed more light on the subject.

Mr Johnston apparently had a business in New Zealand that sold fuel pills in the early 1990s.

More recently there were wild stories about running the gauntlet in Russia, where he’d faced death threats because he was saving big companies so much money on their fuel.

Such colourful stuff has been more recently layered with more serious matters.

There’s the issue of stakeholders suing because they believed they’d missed out in a corporate restructure.

Recently, an Australian Securities and Investments Commission investigation into the group became public.

It’s hard to know what to think of all this.

It’s an unfortunate fact that there’s not a great track record of tax-shelter tech companies rising out of WA and successfully doing business in countries that don’t always value intellectual property, let alone the rule of law.

That’s not to say it’s impossible, of course.

The one investor WA Business News managed to track down suggested that, while there had been significant mistakes by Firepower in recent years, it did not take away from the fact that the company may well have a reasonable business plan.

The investor, who was not the least bit enamoured with Firepower’s management, suggested the company’s plan was selling additives or conditioners – developed from widely known concepts – to big energy users in the developing world, where fuel standards were often poor and small efficiency gains translated into big savings.

Operating in parts of the world where intellectual property is not easily preserved, the investor had a quick bit of reasoning. Pricing.

“The model is: as long as they [the customers] are making more than you, then who cares.”

Perhaps, then, there really is a good reason for secrecy?

There has been some talk of a delayed listing on the Alternative Investment Market in London.

If Firepower decides to take on that challenge, I’m sure we’ll all learn a lot more.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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