The Australian Securities and Investments Commission says it is closely examining the sale by Sequoia Financial Group of its beleaguered InterPrac Financial Planning subsidiary and the revocation of a deed of cross-guarantee between InterPrac and other Sequoia group entities.
Sequoia announced to the ASX on Tuesday it had signed and completed a share-sale agreement with Bellbird Australia to dispose of InterPrac for $200,000, “subject to customary adjustments”.
“As the sale of InterPrac has completed, Sequoia has revoked the deed of cross guarantee dated 2 June 2022 insofar as it relates to InterPrac,” it said.
InterPrac is at the centre of ASIC’s investigations into the activities of financial advisers authorised by the licensee and their actions in directing the savings of clients into the failed Shield and First Guardian master funds.
Sequoia first agreed in March to sell InterPrac to Conquest Investment Partners for $50,000, telling the ASX on 23 March that a strategic review had found “structural, regulatory and commercial challenges” to the licensee’s long-term viability.
ASIC went to the Federal Court on 8 April seeking to appoint a receiver to investigate whether that sale was “bona fide, fair and reasonable”, and to report on InterPrac’s financial position and solvency.
The regulator said it acted out of concern that “the intended sale of InterPrac may adversely affect the interests of its creditors, including InterPrac’s liabilities arising from AFCA complaints in relation to the Shield Master Fund and First Guardian Master Fund, given that Sequoia may cease to guarantee InterPrac’s debts upon completion of the sale to Conquest”.
The Australian Financial Complaints Authority (AFCA) had made two lead determinations against InterPrac and about 911 complaints were open, ASIC said.
On Wednesday ASIC confirmed that it is “aware of Sequoia’s ASX announcement regarding the sale of InterPrac”.
“We are closely scrutinising the transaction,” a spokesperson tells Professional Planner.
Investor advocate Melinda Kee says that her biggest concern in the sale of InterPrac to Bellbird is “what this sale and the cancellation of Sequoia’s cross-guarantee could mean for investors if InterPrac loses its Federal Court challenge against AFCA, or if the case is dropped”.
In March, Sequoia commenced Federal Court proceedings against AFCA over a determination published the previous December concerning complaints about advice provided by an InterPrac authorised representative relating to the Shield Master Fund.
The action alleges AFCA did not “adequately take account of the conduct of other parties connected with the Shield Master Fund when allocating responsibility for losses arising from the fund’s collapse in accordance with the AFCA Rules”.
Sequoia said in May it had been informed by AFCA that the authority would not issue any further determinations involving InterPrac clients before the conclusion of the Federal Court proceedings.
Kee tells Professional Panner that the sale of InterPrac to Bellbird raises the question of “who ultimately stands behind those liabilities now, and will there be enough money to pay investors with successful AFCA determinations?”.
“ASIC previously stepped in over concerns about creditors. Investors deserve to know what has changed and whether their ability to recover their money has now been weakened,” she says.
Under deed of cross-guarantee, Sequoia group entities may be released only if Sequoia’s directors certify that a sale is bona fide and the price is fair and reasonable. Sequoia had executed a revocation deed on 12 September 2025 to release InterPrac, disclosed in its February half-year report.
Sequoia told the ASX on 10 April that ASIC’s concern was “unfounded”, and that a receiver would not stop InterPrac trading or the sale proceeding. It said the court action prevented the directors certifying the sale was bona fide and for a fair and reasonable consideration.
Sequoia terminated the Conquest agreement on 1 May, citing “cost, complexity and uncertainty” surrounding the deal.
ASIC’s proceeding continued until 30 July, when the court granted it leave to discontinue after InterPrac and Sequoia gave undertakings not to take certain steps under the deed in respect of the Conquest sale.
Sequoia told the market on 26 August it had appointed an independent adviser to run a new sale process.
ASIC’s civil penalty case against InterPrac, filed on 13 November 2025, alleges the licensee failed to ensure former authorised representatives Venture Egg and Rhys Reilly Pty Ltd complied with best interests’ obligations.
ASIC says the two advised more than 6800 clients to invest about $677 million of their super in Shield and First Guardian. It is seeking declarations, civil penalties and orders restraining InterPrac from carrying on a financial services business.
The matter is listed for case management on 9 April 2027.
Leave a Comment
You must be logged in to post a comment.