The Department of Foreign Affairs and Trade will soon complete an inquiry into conflict-of-interest allegations concerning Australia's high commissioner to Pakistan, Zorica McCarthy.
The department has been investigating Ms McCarthy's purchase of shares in the failed fuel technology company and sporting sponsor Firepower BVI.
Confirmation that the DFAT probe was ''near to completion'' came as the Australian Securities and Investments Commission began civil proceedings in the Federal Court yesterday against companies and individuals linked to Firepower.
The commission alleges Firepower chairman and director Tim Johnston and others raised funds in breach of corporations law by failing to provide a prospectus that would give investors the information necessary for informed investment decisions.
The separate DFAT probe concerning Ms McCarthy was triggered by a Sydney Morning Herald report last month that the high commissioner had facilitated Firepower business in Pakistan and then bought shares in the company at a fraction of its listed price.
Ms McCarthy reportedly bought 200,000 Firepower shares at 10c a share two weeks after organising a ceremony in November 2005 at which a Pakistani company and Firepower signed a business agreement. Ms McCarthy also bought 10,000 shares for her two daughters at 50c a share, the price Firepower shares are reported to have been at the time.
DFAT confirmed yesterday MsMcCarthy disclosed her shareholdings in her 2006 private interests declaration and she rejected any implication of wrongdoing.
Firepower marketed a liquid and a pill it claimed provided greater fuel economy for vehicles.
The company has been under investigation by the Australian Securities and Investments Commission since March 2007 and MrJohnston's whereabouts are unknown.
ABC Television's Four Corners program highlighted Austrade's support for Firepower last night, including awarding $394,000 in grants. Former Austrade officer and later Firepower director John Finnin said the company enjoyed high-level government access in Australia and overseas. ''It gave them another level of credibility, another level of legitimacy, whereby they were able to say they were being supported by the Australian Government,'' he said. Asked about Austrade's scrutiny of the company, Mr Finnin said ''one could describe it as inadequate''.
At the time of Ms McCarthy's purchase of Firepower shares, DFAT's conflict-of-interest guidelines required that heads of mission provide the department with an annual statement of their private interests with ''any significant changes in circumstances [to be] reported as they occur''.
One DFAT source told The Canberra Times there was concern within the department that the probe into Ms McCarthy's shareholdings had been a distraction in a post critical to Australian efforts to combat terrorism. ''Islamabad is a busy and important post,'' the source said. ''It's particularly unfortunate that our head of mission there should be the subject of a serious internal investigation.''
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