Former Firepower chairman Timothy Johnston banned for managing company for 20 years, ASIC criminal investigation believed underway

The founder and former chairman of Firepower, Tim Johnston, has been banned for serving as a director for two decades, one of the heftiest penalties for a director ever delivered, with the Federal Court noting a lack of remorse and saying his conduct is the kind which “diminishes investor and public confidence in commercial markets”.

The Federal Court in Perth yesterday also banned former financial adviser Quentin Ward from managing a company for six years, and ordered the pair to pay the Australian Securities and Investment Commission’s costs.

The Australian Securities and Investments Commission is believed to be continuing a criminal investigation into Firepower, the collapsed company which had claimed its fuel pill would eliminate cars’ poisonous emissions and boost fuel efficiency.

The Perth-based company had promised investors it would list on the London Stock Exchange. It went into liquidation in 2008 after raising about $100 million from more than 1,000 investors, including former AFL footballer Wayne Carey.

Justice John Gilmour said that “though there has been no evidence of dishonesty, the evidence does reveal a reckless disregard by Mr Johnston for legal requirements concerning corporate funding and corporate governance generally.”

“Mr Johnston did not proffer any evidence of good character, remorse or contrition.”

ASIC chairman Greg Medcraft said the regulator “will not hesitate to act” when investors are not given all the information they need to reasonably make an informed decision about a company.

Earlier in the year, Ward was found by the Federal Court to have contravened the Corporations Act by distributing application forms for an offer for the sale of shares in Firepower BVI.