The fallout from mystery fuel-additives group Firepower continues to grow with up to 600 Western Australian investors facing the prospect that their shares could be worthless.
Insolvency specialist Bryan Hughes from Pitcher Partners said he had been inundated with calls from investors since it was revealed that he had advised Perth businessman Ross Graham in his attempts to buy control of Firepower.
"I have been contacted by a large number of shareholders who are clearly concerned and want to know what is going on," Mr Hughes said.
Mr Hughes said he was weighing the options available as a next step, bearing in mind that another party was already attempting to wind up a Firepower entity understood to be the main representative of the group in Australia.
He said there were about 1200 investors, about half of which were in WA.
Many appear to have been sold shares in 50,000 parcels via a network of financial advisers at prices ranging from as little as 10 cents per share to as much as $1.
Shares were advertised this week for 5 cents each by Criterion Holdings Pty Ltd, a company linked to Adrian Fini, who admitted he himself had bought shares in the company.
"Everyone in the world has them," he said, reflecting the widespread reach of the Firepower proposition which was sold heavily in 2006 and 2007.
Another Perth businessman, Warren Anderson, has reportedly made $20 million selling Firepower shares.
Mr Graham has committed about $20 million to the group, almost equally divided between debt and equity, and is viewed as having kept the group's very public sponsorship of the Western Force rugby team alive.
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.
Mr Graham is understood to have become wealthy through direct involvement in mining but is better known as the head of mining equipment sales and rental group Executive Traders, which has also been a big sponsor of rugby in WA.
Last week, he issued a statement claiming he had been attempting to acquire a controlling interest in Firepower to rescue the business, but those negotiations had failed.
"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.
The businessman's biggest problem will be unravelling the mystery of Firepower to determine what exactly he has invested in.
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