In an ASX listing on Friday, Sequoia Financial Group said the regulator’s Federal Court action was limited to its cross deed of guarantee.
Last week, ASIC lodged proceedings in the Federal Court seeking the appointment of a receiver to investigate a proposed sale of Interprac Financial Planning, which is a wholly owned subsidiary of Sequoia.
According to ASIC, if the Court appoints a receiver they will investigate and report on whether the sale of InterPrac’s shares by Sequoia to Conquest Investment Partners for $50,000 is “bona fide, fair and reasonable, and report on Interprac’s financial position and its solvency”.
“ASIC is bringing this application 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 regulator said.
“To date, AFCA has made two lead determinations against Interprac. There are approximately 911 open AFCA complaints against InterPrac in relation to advice provided by its representatives to invest in the collapsed Shield and First Guardian Master Funds.”
ASIC also noted that the broader Sequoia Financial group had been part of a deed of cross guarantee since 25 May 2022, under which each of the entities within the group guaranteed the debts of the others if it was wound up.
Sequoia had previously sought to end the cross guarantee but agreed with ASIC to withdraw the revocation deed in early March.
“The Company confirms that ASIC has commenced Court proceedings to seek the appointment of a receiver over certain property of InterPrac, namely the guarantees in the ASIC cross deed of guarantee which the Company, InterPrac and the other Sequoia group companies are party,” Sequoia said on Friday.
“The proceeding seeks to secure those guarantees so that the receiver can prepare a report for ASIC as to whether the sale of InterPrac to Conquest announced on 23 March 2026 is a bona fide sale and whether the consideration for the sale is fair and reasonable within the meaning of the ASIC Cross Deed of Guarantee and to also report on the financial position and solvency of InterPrac.
Sequoia added that ASIC seeking to appoint a receiver does not extend to any property of InterPrac other than the cross guarantees.
“Any such appointment of a receiver by the Court will not prevent InterPrac from being able to continue to trade in the ordinary course nor would it prevent the proposed sale of InterPrac to Conquest from proceeding,” it added.
“If a receiver is appointed, the receiver will have no power to dispose or encumber any property of InterPrac.”
Noting that ASIC has expressed concern that the InterPrac sale could “adversely affect” the interests of InterPrac’s creditors, including in relation to AFCA complaints, the firm said that it “believes that concern is unfounded”.
“InterPrac will remain a party to the ASIC Deed of Cross Guarantee immediately following the sale of InterPrac to Conquest. The ASIC Deed of Cross 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,” it said.
“Secondly, the AFCA complaints have resulted in two determinations against InterPrac to date. No other liabilities have arisen from the AFCA complaints at the date of this announcement.”
Sequoia also pointed to InterPrac’s legal action against AFCA over a “lack of fairness” in the complaints process related to Shield and First Guardian.
Speaking with ifa in March, Sequoia managing director Garry Crole said that the decision to sue AFCA was not related to that specific determination, rather it is “with respect to fairness and breaching their own rules”.
“They’re not prepared to consider all the parties that are relevant to the loss,” Crole said.
“So, we actually think we’re acting in the best interest of the members, as we did when we called out Netwealth and Macquarie to make compensation under ORFR.
“We’re of the belief that members will be best served if all parties can be part of the solution, rather than what AFCA is attempting to do, and that is put everything against the adviser and nothing against any other party, which basically sends everything to the CSLR and is bad for the industry.”
In November last year, the regulator commenced civil penalty proceedings against InterPrac, including seeking orders to restrain the licensee from carrying on a financial services business.
In its filing to the Federal Court, the regulator alleged that “thousands of Australians were exposed to poor financial advice and significant risks” from the Shield Master Fund and First Guardian Master Fund through “critical oversight and compliance failures” by InterPrac.
from chatty:
Can directors “avoid creditors” via transactions?
This is where your scenario sits.
Directors cannot:
Strip assets out of a company to leave creditors behind
Transfer liabilities in a way designed to defeat creditor claims
Enter transactions that are not arm’s length / commercial / for proper value
If they do, those actions can be challenged as:
Uncommercial transactions
Unreasonable director-related transactions
Voidable transactions (if insolvency follows)
Potential breaches of directors’ duties (ss180–184 Corporations Act)
ASIC, liquidators, or courts can unwind these.
Why not use any of these steps in the Dixon debarcle. In that case ASIC hired their employees to head up enforcement of other areas. It’s selective corrupt and rotten
The commentary around this matter has largely focused on ASIC’s Federal Court proceedings and Sequoia management’s rebuttal. Both miss the more fundamental point.
Whether the sale of Interprac to Conquest Investment Partners for $50,000 is bona fide, fair and reasonable is not ultimately a question for ASIC, receivers, or industry commentators to resolve. It is a question for the shareholders of Sequoia Financial Group — the people who actually own the company.
ASIC’s standing here is narrow and explicitly scoped to the cross deed of guarantee and creditor protection. That is legitimate. But the broader governance question — whether Sequoia’s board has executed a transaction that fairly reflects the interests of its shareholders, whether $50,000 represents appropriate consideration for a subsidiary carrying 911 open AFCA complaints, and what liability is being shed or retained — belongs squarely in the hands of shareholders.
Directors are accountable to shareholders first. If this transaction materially alters the company’s risk profile or asset base, shareholders have every right to demand a full explanation, and where appropriate, a vote.
The industry should be careful not to conflate ASIC’s creditor-protection mandate with the separate and equally important question of shareholder accountability. They are not the same thing, and treating them as such does a disservice to both.
Damn weasels in suits, they are everywhere!
Weasel out of this weasel out of that, lie here, lie there, tell shareholders one story, tell investors another, tell asic another one , say whatever suits the room at that time and believe nothing.
Pull this leg, pull that leg, cant lie straight in bed, retire with a million bucks but no heart or soul.
End up rich and lonely
Karma will get everyone of you leeches
If ASIC allows Crole to flog off Intercrap for $50K to someone with no experience in running an AFSL while doing seperate back door deals to move advisers to others AFSL’s Sequioa have interest in or “relatrionships” with then ASIC is the reason the victims of these crimes have occurred in the first place.
Yeh right, of course Crole / Sequoia who tried to get out of the deed of guarantee for Interprac are of course not going to try other ways, like this sale to get out of it.
Crole failed AFSL compliance big time.
Crole now proves an unethical BS artist.
Hey ASIC, how about apply the same processes to Dodgy Dixon’s.