Sequoia Financial Group has scrambled to reassure creditors and potential creditors of its InterPrac Financial Planning subsidiary that the licensee will remain a party to a deed of cross-guarantee, even if a proposed sale to Conquest Investment Partners goes ahead.
Sequoia announced on 17 March that it was exploring options to offload InterPrac, which has been the subject of multiple court actions by the corporate regulator, ASIC, concerning its oversight of authorised representatives involved in placing client funds into the failed Shield and First Guardian master funds.
The identity of Conquest as the proposed InterPrac buyer was revealed by Professional Planner on 22 March. Sequoia announced the identity to the market the next day, along with a sale price of $50,000. The timing of its announcement prompted a query from the ASX concerning the company’s continuous disclosure obligations.
On 8 April ASIC commenced Federal Court proceedings seeking to appoint a receiver to investigate aspects of the sale, citing concerns it could adversely affect the interests of InterPrac creditors, including for liabilities arising from Australian Financial Complaints Authority (AFCA) determinations in relation to Shield and First Guardian, given that Sequoia could cease to guarantee InterPrac’s debts after it is sold to Conquest.
The cross-guarantee has been a source of tension between Sequoia and the regulator since Sequoia revealed in its half-year results in February that it had entered a revocation deed in September 2025 to release InterPrac, Sequoia Asset Management and Sequoia Wealth Management from the guarantee arrangement.
ASIC intervened and Sequoia back-tracked, confirming on March 2 that it had agreed to withdraw the revocation and that its subsidiaries would not be released from the cross-guarantee.
On Friday Sequoia told the ASX that InterPrac will “remain a party to the [cross-guarantee] immediately following the sale of InterPrac to Conquest”.
It said the guarantee can only cease to apply to InterPrac as a result of the sale to Conquest “if the directors of Sequoia certify that the sale is a bona fide sale and the consideration for the sale is for a fair and reasonable consideration”.
“The Court action commenced by ASIC prevents such a certificate from being given.”
Shareholder approval
Sequoia said it was continuing to work with the ASX on whether shareholder approval is required for the sale under ASX Listing Rule 11.2. It said it had expected a determination in the week ending 10 April, “but ASX has sought further clarity on the proposed receiver appointment before ruling”.
“Conquest remains supportive of the transaction, including if the ASX requires shareholder approval of the sale of InterPrac, notwithstanding ASIC seeking to have a receiver appointed to InterPrac,” it said.
The continuation of the cross-guarantee means Sequoia’s other entities remain potentially liable for InterPrac’s obligations, including any amounts arising from AFCA determinations.
In its statement to the ASX on Friday Sequoia said AFCA has made two determinations against InterPrac and that “no other liabilities have arisen from the AFCA complaints at the date of this announcement”.
“Further, as announced on 10 March 2026, InterPrac has commenced proceedings in the Federal Court of Australia against AFCA relating to AFCA’s determination published on 24 December 2025,” it said.
The mooted sale of InterPrac to Conquest was prompted by what Sequoia said was the uncertain viability of the licensee after Macquarie, Netwealth, BT, AMP, CFS and HUB24 restricted its authorised representatives from using their platforms.
Sequoia managing director Garry Crole said at the time that the sale would result in a write-off of $11 million for Sequoia.
InterPrac is the only licensee implicated in the Shield and First Guardian collapse that has not had its licence cancelled by ASIC. Commissioner Alan Kirkland told the Professional Planner Advice Policy Summit in February that the regulator would rely on the courts to determine whether InterPrac should continue to hold an Australian financial services licence.
The regulator alleges that one InterPrac authorised representative, Ferras Merhi, signed 6000 Statements of Advice in the space of just three years and used marketing companies to refer prospective clients to his financial advice businesses, and that he was paid about $18 million in upfront advice fees and a further $19 million by entities associated with the funds to market them.
ASIC also alleges InterPrac began receiving client complaints around September 2024 but that, rather than investigate them, InterPrac sent a template response asserting the advice given to them had been appropriate.
The regulator will argue in court that InterPrac had the tools to monitor both the revenue its authorised representatives were generating and the specific products in which client money was invested, but that it failed to use them.
InterPrac is the only solvent licensee still implicated in the collapse.
ASIC has taken action against both funds over allegations that investor money was misused on high-risk investments, directors’ pet projects, and personal expenses. Both court proceedings are ongoing.
