KEY POINTS:
Tim Johnston seemed to have found the answer to the global energy crisis: a pill, which when popped into a car's engine, improved fuel efficiency by one-third and cut harmful emissions.
Investors were impressed, buying more than A$80m (NZ$101m) worth of shares in Mr Johnston's company,
Firepower, on the promise of a stock market listing. The Australian businessman enjoyed an opulent lifestyle, and bought himself expensive toys, including the country's leading basketball team, the Sydney Kings.
The 51-year-old claimed to have contracts for his pill all over the world. But then things began to go awry. Players' wages were not paid. The debts piled up. And Mr Johnston was nowhere to be seen.
The Kings are now in liquidation, and investors - including prominent Australian footballers - are nursing burnt fingers. Liquidators have tried to contact Mr Johnston without success. According to some reports, he is holed up in London, where his preferred residence is a Mayfair apartment costing £5,000 a week.
The Australian media, meanwhile, have uncovered documents revealing that the fuel-saving properties of Firepower's little pill are - perhaps not surprisingly n unproven.
According to The Sydney Morning Herald, the company used fake tests to promote the product in Russia, where Mr Johnston told shareholders he would make tens of millions of dollars. Russia pulled out after discovering that results had been falsified. Firepower's own former chief executive, John Finnin, warned Mr Johnston that the pill was worthless without scientific proof.
Yet the company engaged the interest of the likes of John Howard, the former Australian prime minister. Mr Howard witnessed the signing of a deal in Pakistan, where Australia's High Commissioner, Zorica McCarthy, later bought 200,000 Firepower shares.
Peter Holmes ourt, a top Australian businessman, was similarly enthusiastic, and arranged for Mr Johnston to meet Russell Crowe, the Hollywood actor, at a gala dinner in Los Angeles. Mr Holmes ourt and Mr Crowe jointly owned a National Rugby League team, the South Sydney Rabbitohs, which was among many sporting teams, star players and charitable organisations that Firepower generously sponsored.
It included the Steve Waugh foundation, the Welsh Cardiff Blues rugby union team, the Tongan national rugby team and Australia's V8 Supercar race. Those individuals and organisations are now owed millions of dollars. Yet Mr Johnston allegedly splashed money around even as his company was losing A$1m a month. He flew to France last year by private jet to attend the Rugby World Cup.
Mr Johnston owns a waterfront villa in Bali and a A$5m house on Queensland's Gold Coast. Until recently, he had a mansion in Perth. His wife, Sandra, wears designer jewellery. His daughters, aged 18 and 19, carry designer handbags and wear A$10,000 watches.
According to The Herald, Mr Johnston marketed a similar fuel-saving pill in New Zealand in 1992. The New Zealand Automobile Association tested it and found it did not work. More than a decade later, investors bought into Firepower, after being promised a tenfold return on their money. While their shares are now worthless, and numerous organisations are counting the cost of their association with Firepower, the most pitiable victims must be the Sydney Kings. The basketball team was stripped of its licence after failing to pay its debts.
So is Mr Johnston in London, Bali, Singapore or the British Virgin Islands, where various reports have placed him? Among those wanting to know are the Australian Tax Office and the Australian Securities and Investment Commission, which are investigating his affairs. The Kings' liquidator is seeking a warrant for his arrest.
- INDEPENDENT
