Sequoia caves into InterPrac sale undertaking, ASIC withdraws proceedings

With ASIC withdrawing legal proceedings against Sequoia Financial Group after it entered an undertaking not to put the Cross Deed of Guarantee at risk tied to the sale of InterPrac Financial Planning, the group remains coy about the deal with Conquest Investment Management going ahead.

A spokesperson for Sequoia confirmed options for InterPrac are still being considered but declined to comment if the development with ASIC announced to the ASX on Monday meant discussions to offload InterPrac to Conquest are back on.

On May 1, following ASIC's concerns over the divestment of InterPrac, Sequoia said developments subsequent to signing the share sale agreement "had resulted in circumstances where completion cannot occur on terms consistent with those originally contemplated by the parties."

On July 30, however, the Federal Court granted ASIC leave to discontinue its proceedings that commenced in April, when the regulator sought the appointment of receivers to investigate the validity of the sale of InterPrac to Conquest Investment Management.

At the heart of it was the Cross Deed of Guarantee, to which Sequoia, InterPrac and other related entities are party. ASIC also sought to investigate whether the sale was bona fide and the consideration price of $50,000 was fair and reasonable.

On 25 May 2022, Sequoia Financial, Sequoia Wealth and InterPrac entered into a Deed of Cross Guarantee, meaning each entity guaranteed the debts of its each sister companies in the event of a winding up on certain grounds.

Successfully offloading InterPrac to Conquest without the regulator's intervention would have seen the Sequoia group of entities divest itself of liabilities stemming from the Shield and First Guardian master fund collapses.

In the ASX announcement, Sequoia said the Federal Court "approved an undertaking from InterPrac and Sequoia that they will not deliver to ASIC, for lodging, a certificate or any notice for the purpose of clause 4.2(c) of the Deed of Cross Guarantee in respect of the sale of shares in InterPrac under the share sale agreement executed by Sequoia Wealth Group Pty Ltd and Conquest on or around March 2026."

Subsequently, the court order dated for July 31 confirmed the proceedings had been discontinued.

ASIC said it discontinued the proceedings on the basis that InterPrac and Sequoia Financial gave undertakings to ASIC and to the court that they would not take certain steps under the Deed of Cross Guarantee in respect of the proposed sale of InterPrac to Conquest.

The beleaguered group recently farewelled chief executive Garry Crole, while chair Michael Ryan departed on June 16.