On 1 August, Sequoia announced the establishment of an Australian Financial Services License governance committee, with former ASIC commissioner Danielle Press serving as independent chair.
However, just seven months into the role, Press decided to jump ship and Sequoia didn’t issue an ASX update informing the exchange.
As a result, on 17 April, the ASX issued an ‘ASX Aware Letter’ to Sequoia, asking, among other things, why it had chosen not to issue an update on this matter.
Sequoia responded to the ASX on 24 April, though it wasn’t released publicly until 14 May, explaining that she had notified the chief executive in early March of her intention to “cease services on the AFSL governance committee”, concluding on 31 March.
“The reason given by Ms Press was other commitments on her time,” it said.
While the initial notice of her appointment was labelled ‘material information’, according to the ASX, it questioned why Sequoia had opted not to disclose her resignation.
It reasoned that the primary reason for the initial announcement was actually the establishment of the committee and, after discussions, concluded that her resignation didn’t warrant a separate disclosure under Listing Rule 3.1.
Sequoia argued in its defence that:
- The AFSL governance committee continued to operate effectively, with the remaining members discharging the committee’s responsibility, and
- The company was progressing the proposed disposal of InterPrac, the AFSL that one of the key focuses of the committee’s remit, such that the role and necessity of the committee in its existing form was itself the subject of likely change.
“On those bases the board considered that the resignation was not, on a standalone basis, information that a reasonable person would expect to have a material effect on the price or value of SEQ securities.”
Impairment inconsistency
In an ASX statement on 15 December, Sequoia said it was expecting to recognise several non-cash impairments and provisions in its half-financial year results as part of its “disciplined and conservative approach to balance sheet management, and in light of developments including those relating to the Shield Master Fund and First Guardian Master Fund”.
These were set to include a provision for potential claims under the insurance excess payable under its professional indemnity (PI) insurance, and an impairment of intangible assets pertaining to its Licensee and Adviser Services (LAS) division.
In its questions to the licensee, the ASX asked when it had realised its previous expectation of an impairment was no longer accurate and if it believed that it had an obligation to disclose this under Listing Rule 3.1, also known as the continuous disclosure rule, suggesting that Sequoia may have broken it.
In its response, Sequoia explained that it had conducted an impairment test and in mid-February had concluded that “no impairment of any cash generating was required”.
Then in March, discussions regarding the potential offloading of InterPrac had begun, triggering the need for another impairment test.
“The February 2026 management accounts were finalised on 17 March 2026, reflecting a write-off of approximately $4.7 million attributable to InterPrac’s customer list intangible asset (an acquired intangible asset originally being amortised over 20 years), having regard to the accelerating decline in authorised representatives resulting from platform providers withdrawals during the period,” it said.
As for the Listing Rule 3.1 concern, Sequoia believes it did have a disclosure obligation and “consider it has at all relevant times complied with that obligation”.
Then on 23 February, Sequoia’s said in its half-year results that the market capitalisation of the group was below the book value of its equity, “indicating a potential impairment of goodwill”.
“The value in use calculation for each cash generating unit [CGU] exceeded the carrying amounts. The input assumptions except for an increase to 18 per cent for the discount rate of Sequoia License and Advisor Services CGU remained consistent with those disclosed in the annual financial statements for the year ended 30 June 2025. As a result, there has been no impairment as at 31 December 2025.”
However, the ASX look issue with the increase to its discount rate from 15.4 per cent, asking why Sequoia thought raising the rate was appropriate given the prior discount rate was previously advised by an external consultant.
In response, Sequoia said the increase reflected the “increased CGU-specific risk premium” attached to the Sequoia LAS business as well as the “elevated regulatory and litigation-related uncertainty applicable to the business at the relevant date”.
Further, it said the higher 18 per cent rate was also advised by an external consultant.
This isn’t the first time Sequoia has been in the ASX hot seat recently after facing questions in November over concerns it had failed to inform the market of the impending ASIC civil action again the licensee.
On 13 November, the industry regulator announced it had launched actions against InterPrac Financial Planning, alongside MWL Financial Services and SQM Research in relation to the Shield and First Guardian collapses.
While Sequoia was quick to jump to its own defence, the ASX appeared concerned that it didn’t act fast enough to alert shareholders of the impending lawsuit.
