what is going on, page-34

*



Liam Walsh

November 20, 2009 11:00pm

A FILIPINO investor behind a delayed $US35 million ($A38 million) lifeline to weapons developer Metal Storm was at the centre of allegations of funds misuse in a Philippines government-backed lottery.

Brisbane-based Metal Storm, whose flagship product is a three-shot grenade launcher, said it had checked the dispute and was satisfied it was only a political tangle.

Metal Storm was yesterday waiting for the first tranche of a $US1.9 million payment from private investor Robert Rivero for shares. He has already missed five deadlines.

Shareholders have to approve Mr Rivero's total $US35 million equity-and-loan package.

The Courier-Mail can reveal Mr Rivero had a role in allegations of funds misuse at the Philippine Charity Sweepstakes Office. Mr Rivero had been a PCSO consultant who, according to local media reports, raised claims President Gloria Arroyo's husband Mike had misused the charity's funds.

But in a 2001 press release presidential spokesman Rigoberto Tiglao claimed Mr Rivero could not prove his allegations. Mr Tiglao alleged Mr Rivero was only trying to pre-empt accusations against Mr Rivero himself of seeking commissions for PCSO ad placements.

"We've looked at this and on balance we think it was about politics and not in any way at all about the integrity or honesty of any individual," Metal Storm chairman Terry O'Dwyer said. He declined to specify what steps Metal Storm had taken but maintained Mr Rivero's funds were legitimate.

"He acts from his own balance sheet but has access to private equity," Mr O'Dwyer said.

Mr O'Dwyer said the cash-strapped company was just waiting for a bank to transfer Mr Rivero's money into an Australian account.

Metal Storm has conducted due diligence on funds, including their origin.