Mercorella man dumped by Lion22dec05A MAN who is related to a...

Mercorella man dumped by Lion

22dec05
A MAN who is related to a former member of the Gypsy Joker bikie club lost his bid to remain on the board of Lion Energy following a vote at the oil and gas company's annual meeting in Perth yesterday.

The man, Julian Waterman, had been appointed to the board of the former Adelaide company by the previous management in June.

However yesterday, a motion to formally elect him was defeated by a vote of 779 million shares to 578 million.

About 500 million shares were voted by Michael Fuller, a lawyer and former bankrupt who escaped criminal prosecution in relation to the sale of an Oklahoma oil field.

Valued at less than $4 million, it was sold for more than $37 million to South Australian company Beach Petroleum in 1989.

Fuller was declared bankrupt in 1993 after the Federal Court ordered him to pay Beach Petroleum $44 million in damages resulting from the Oklahoma deal.

He escaped facing criminal proceedings in the SA Supreme Court and in Western Australia, under Dietrich provisions, because he successfully argued he did not have the money to defend himself against the complicated charges.

Mr Fuller could not be contacted yesterday, but Mr Waterman said he did not have any business or personal connection with him.

Mr Waterman admitted yesterday he was asked questions at the meeting about his former directorship of a company called Tulloch Lodge, which is alleged to owe Lion Energy $500,000 of the $2.9 million in bad debt accrued by the company while under the control of its former managing director, Giuseppe Mercorella.

Tulloch Lodge is one of several companies tied up with the so-called Mercorella Scheme, an unlicensed investment scheme which has left mostly South Australian investors more than $60 million out of pocket.

Mr Waterman, who had been appointed to the board by Mr Mercorella, said yesterday he was also owed a "substantial amount" of money by him and that he did not even know the $2.9 million in bad loans existed.

"I don't know Mr Mercorella very well at all but he was the person who asked me to be a director," he said.

Mr Waterman said he did not know why he was asked to be a director and did not know why Mr Fuller voted to support his election yesterday. He has no experience in the oil and gas industry.

Mr Waterman is a relative of former Gypsy Joker Anthony Sobey who is claiming mortgages over $17.4 million worth of property as security for money owed to him by the Mercorella Scheme.

Mr Mercorella stepped down from the board of Lion and related company Entek Energy in July after the Australian Securities and Investments Commission's concerns with his investment scheme became public.

The scheme was offering investors 2-5 per cent interest per month but collapsed mid-year, leaving many investors out of the money.

Mr Mercorella has since been charged with 24 offences relating to his dealings in Lion and Entek shares. Mr Mercorella will be examined by ASIC in the Federal Court today.