Strife on the beachArticle from the Sydney Morning Herald...

Strife on the beach

Article from the Sydney Morning Herald today

VETERAN wheeler and dealer Boris Ganke faces losing his stake in a Fijian beachfront property if shareholders storm the fortress at a company he chairs, Southern Cross Exploration (which glories in the raunchy ASX code SXX).

For seven years, Ganke has been locked in battle with Adelaide investor Tim Lebbon over the future of SXX. Lebbon has sued the company twice and called three shareholder meetings trying to tip out directors aligned with Ganke.

Lebbon, who owns 14.5 per cent of the company, has been unsuccessful so far, but will hope it's third time lucky when shareholders meet later this month.

Backing up his latest bid are a pair who together claim to control an additional 29.5 per cent of the company: Bruce Burrell, who is a director of two other Ganke-chaired companies, and stockbroker Alex Keach.

In their sights are Ganke's son Eugene Ganke and Evelyn Goh, who is Ganke's business partner in the Fijian venture, whom they hope to replace with Burrell and Keach. But they plan to retain Ganke snr.

Goh and the elder Ganke are directors of and shareholders in Nadi Bay Beach Corporation, which owns a property with 500 metres of beachfront. Southern Cross owns 20 per cent of the company and has extended it a $7 million loan.

''Interest is not paid in cash each year thus putting SXX under constant cash flow pressure,'' Burrell and Keach said in a letter to shareholders. ''We believe that SXX should develop a definite plan for the realisation of this asset by enforcing its rights under the mortgage … this will not happen under the current management.''

In their letter to shareholders, Ganke and Goh described this as ''an attempted takeover on the cheap'' and claim that ''the company's prospects may be damaged if the current board is removed''. All will be revealed when shareholders meet in Sydney on February 26. In the meantime, SXX's latest quarterly ASX report shows it had just $6000 in the bank as of December 31, having burnt through $133,000 in the previous three months.

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