ASIC stalls Sequoia bid to ditch cross guarantee deed

ASIC is again putting up roadblocks to Sequoia Financial Group's attempt to revoke the deed of cross guarantee with InterPrac Financial Planning, asking more questions and requesting more information before the group rids itself of all liabilities arising from the Shield and First Guardian disaster.

Providing an update to the ASX this morning, Sequoia said it "will cooperate with ASIC and answer all of its requests as promptly as possible."

On October 13, Sequoia quietly finalised the divestment of InterPrac to a little-known private investor Bellbird Australia for $200,000.

Bellbird was set up by Scott Beeton, the founder and former chief executive and managing director of Sequoia until 4 February 2019. It is understood that Beeton, who is currently the managing director of ASX-listed diversified financial services and investment company ARC Funds, launched Bellbird as a shell company days before the divestment was announced.

Today, Sequoia said the statement to revoke the deed of cross guarantee dated 2 June 2022 was made on the basis that all relevant conditions for the cessation of the deed in respect of InterPrac had been met, including the lodgement of documentation with ASIC.

ASIC has since informed Sequoia the documents submitted to it are "under consideration, had not yet been accepted for lodgement under section 1274 of the Corporations Act 2001 (Cth) and that all conditions to the cessation of the deed in respect of InterPrac would not be met unless and until ASIC accepted the lodgement."

ASIC has also asked Sequoia to provide certain information under section 1274(9) of the Corporations Act 2001 for the purposes of ASIC's consideration regarding the lodgement.

Section 9 of the act states ASIC "may require a person who submits a document for lodgement to produce to ASIC such other document, or to give to ASIC such information, as ASIC thinks necessary in order to form an opinion whether it may refuse to receive or register the first-mentioned document."

ASIC successfully intervened in Sequoia's first attempt to divest InterPrac for $50,000 in March to Conquest Investment Partners.

The regulator went to the Federal Court to seek the appointment of a receiver to investigate the sale of InterPrac to Conquest, saying it had concerns over what it may mean for the advice group's creditors.