The board of investment platform Raiz has replaced Australian Executors Trustees (AET) as its independent custodian, in what comes as the latest development in the Sargon saga.
Raiz has appointed Perpetual Corporate Trust as its new independent custodian, effective from February 27 this year.
"Perpetual Corporate Trust is a respected and leading provider of custody services," Raiz said.
"Perpetual Corporate Trust is a member of the Perpetual Limited group which has provided trustee and custodial services since 1886.
|Sponsored by OnePath Life|
Join us on the New Path
"We will terminate our relationship with Australian Executors Trustees."
Perpetual Corporate Trust has been appointed under a custody agreement, and will independently hold the assets of Raiz Invest's Australia fund as its key service provider.
Perpetual will have no supervisory role in relation to the operation of the fund and has no liability to individual investors for omissions made in accordance with the custody agreement.
It comes after Sargon announced it had found a buyer for eight of its companies to an external, unnamed buyer in an exclusive sale agreement. These include business units such as AET, Diversa Trustees, CCSL.
Although the sale price is currently unknown, it is thought to be much less than the original purchase price paid by Sargon for the three aforementioned businesses ($94.6 million).
Sargon and its subsidiaries are currently under the firing line, with HUB24, OneVue, Westpac and Taiping Trustees chasing the group for millions of dollars owed in debt.
Eight companies within the Sargon group currently face approximately $154 million in total liabilities, including secured debt claims of about $65 million, unsecured creditor claims of approximately $12 million, priority claims owed to employees of around $2 million and intercompany loans of about $75 million.
IOOF sold its AET corporate trust business to Sargon in October 2018 $51.6 million.
At the time, AET said it was excited to join the now embroiled firm.
"The AET Corporate Trust team is excited to join Sargon, and will continue to provide leading corporate trust services to its clients under Sargon," it said.
"AET Corporate Trust is strategically aligned to Sargon's mission to enable institutions and entrepreneurs to build better funds and financial products. Powered by Sargon's powerful combination of modern technology, financial licenses and industry experts, we will continue to empower and better serve our clients."
Sargon entered external administration at the hands of one of its Chinese creditors, Taiping Trustees, on January 30.
Since then, Sargon has appointed voluntary administrators to eight of its companies; including Sargon Superannuation Holdings, Sargon Services Pty Ltd and Sargon CT Holdings Pty Ltd; while OneVue sold off shares in Sequoia, recouping $4.36 million after it took control of Sargon's 19% stake in the wealth advice firm.
OneVue is also trying to find a buyer for Madison Financial Group, a dealer group acquired by Sargon in 2018.