Sequoia abandons InterPrac sale

Following ASIC's concerns over the transaction, Sequoia Financial Group tore up the agreement to sell InterPrac Financial Planning to Conquest Investment Partners, saying the two parties failed to satisfy all the conditions within the required timeframe.

Sequoia announced it will offload InterPrac to the little-known Conquest Investment Partners for $50,000 in late March.

The regulator jumped on this, applying to the Federal Court for KPMG to investigate the proposed sale.

ASIC expressed concerns the sale could adversely affect InterPrac's creditors, including its liabilities in relation to complaints sitting with the Australian Financial Complaints Authority (AFCA) regarding the collapse of the Shield and First Guardian Master Funds.

In an update to the ASX, Sequoia said developments subsequent to signing the share sale agreement "resulted in circumstances where completion cannot occur on terms consistent with those originally contemplated by the parties."

"Having regard to the expected cost, complexity and uncertainty associated with progressing the transaction under these revised circumstances, the company determined that it is not in the best interests of shareholders to proceed. Accordingly, the proposed sale of InterPrac to Conquest will not proceed," Sequoia said.

Sequoia currently has about 900 InterPrac-related complaints sitting with AFCA stemming from the collapsed Shield and First Guardian master funds.

About $677 million is estimated to be owed to investors who were advised by InterPrac representatives to invest in the failed funds.

ASIC insisted a receiver must be appointed to investigate and report on whether the deal made between Sequoia and Conquest is "bona fide, fair and reasonable", and report on InterPrac's financial position and solvency.

Sequoia recently assured shareholders ASIC's concerns around the sale of InterPrac were "unfounded" and it was working with the ASX to determine whether shareholders are required to approve the transaction.

Selling 100% of the shares in InterPrac to Conquest would have meant the latter taking on all assets and liabilities of the troubled advice practice.

InterPrac currently has a professional indemnity (PI) insurance policy worth $20 million covering the failures of Shield and First Guardian.

Going forward, Sequoia's board said it will continue to assess strategic options for InterPrac and will update the market in accordance with its continuous disclosure obligations.