CBD

Ex-friends wind each other up CBD Ben Butler

They were spandex-tight superfriends who took on the market and won at the helm of Ausbil Dexia, but now Reubert Hayes and Paul Xiradis are headed for a fiery showdown replete with cartoon-style sound effects.

The scene of the stoush is listed fund Emerging Leaders Investments, which Ausbil Dexia has managed since 2005.

Hayes threw the first punch last month when his super fund, Solhurst, requisitioned a unit holder's meeting to oust ELI chairman John Evans and director John Skippen, the former finance chief of Harvey Norman. Solhurst recently popped up with a 5.18 per cent stake in ELI while the listed WAM Capital holds 19.9 per cent.

Hayes made his move with a view to winding up ELI because, according to Solhurst, there was not enough access to Ausbil's emerging leaders processes. But the meeting requisition was firmly rejected by Xiradis - known as Mr X but not to be confused with Professor X of X-Men fame - on legal advice. ELI reckons "the requisition is invalid", so the company "will not be convening the general meeting of shareholders".

Scratch the surface and the story becomes as much a Mills & Boon novel of spurned lovers as it is a clash of stockmarket superheroes.

When Hayes stepped down as CEO of Ausbil in 2005, he handed the baton over to his protege, Mr X ... who is now not returning the favour. In a sternly worded letter to shareholders on April 2, Mr X wielded the big stick, saying that if the winding up was successful, it would result in a substantial damages award against ELI.

According to the letter, Mr X and Hayes were involved in the establishment of ELI, before which Hayes was CEO of Ausbil and Mr X was the "strategist". But despite Hayes being involved in the ELI set-up, he only held one share in the shelf company.

"Solhurst did not acquire shares in the ELI IPO in 2005 ... and has only recently become a substantial shareholder - on March 5 this year," the April 2 letter says. "It is clear ... that Solhurst and Mr Hayes have a history of acting opportunistically in relation to ELI." Pow! Biff!

ELI adds: "In addition, ELI's defence of Ausbil's claim would likely incur substantial legal costs ... The net effect of these occurrences would be a substantial reduction in the assets of ELI available for distributions to shareholders on the completion of any winding-up."

Adding more fuel to the fight, on April 8 Ausbil announced an equity raising of $8.2 million that will dilute Hayes' stake unless he takes it up.

Out for a spin

For many directors, elevation to the chairmanship carries with it the glorious prospect of riding home from board meetings in the comfortable leather seat of a European luxury car driven by an obsequious chap in a peaked cap.

Not so for chairman-at-large John Harkness, who CBD's spy swears was riding the people's limousine, the bus, on Tuesday night. While there was a chauffeur of sorts and the vehicle was a Mercedes-Benz, there were at least another 50 people on board the 246 bus, rolling towards Spit Junction on Sydney's lower north shore.

It seems Harkness, chairman of Reliance Rail and a director of property groups Goodman, Charter Hall Retail REIT and Sinclair Knight Merz Management, has not forgotten how to keep shareholders' cash intact. After all, he did spend 24 years as a partner of KPMG and five years as the accounting firm's national executive chairman.

Singo buys up

It seems you can't keep leathery adman John Singleton out of the rubbity dub. The Australian Pub Fund, owned by maaates including Singo, Geoff Dixon and Mark Carnegie, has snapped up the Elephant Arms Hotel in Brisbane and the Bristol Arms Hotel in Sydney. The fund is looking to snap up more than $100 million of hotels.

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bbutler@fairfaxmedia.com.au