Sequoia calls in Takeovers Panel over shareholder dispute
Sequoia Financial Group has contacted the Australian government’s Takeovers Panel regarding alleged unethical practice by a group of shareholders seeking to oust its chief executive.
The panel, which seeks to resolve disputes in takeovers in Australia, said it has received an application from the advice licensee in relation to the shareholder dispute.
It was announced last month that a group of shareholders are seeking to oust chief executive, Garry Crole, and director, Kevin Pattison, from the board and appoint two replacements of their suggestion in the form of Brent Jones and Peter Brook.
Jones has been the firm’s head of professional services since December 2017. He previously spent 15 years as managing director of InterPrac which was acquired by Sequoia in 2017. Brook has been chair of Diverger – which was recently acquired by Count – since December 2021, having previously been chair of Xplore Wealth in 2019.
An extraordinary general meeting is due to be held on 4 June.
Sequoia has now made the application to allege undisclosed associations by the shareholders who are seeking to control or influence Sequoia’s affairs.
These allege the shareholders:
- Failed to fully disclose the identity of those who are associated with them, the nature of their association and the extent of their collective voting power in Sequoia.
- Purchased additional Sequoia shares resulting in increases in collective voting power above 20 per cent in Sequoia, under Sect 606.
Section 606 of the Corporations Act prohibits certain acquisitions of relevant interest in voting shares.
In light of the alleged offences, Sequoia is now seeking final orders that:
- The alleged associated parties give Sequoia a corrective substantial shareholder notice (in a form acceptable to the panel).
- Certain of the alleged associated parties must not exercise, and Sequoia must disregard, any voting rights in Sequoia shares which they acquired on or after 31 March 2024.
- The relevant shares be vested in ASIC for sale.
“A sitting panel has not been appointed at this stage and no decision has been made whether to conduct proceedings. The panel makes no comment on the merits of the application,” the panel said.
The panel noted that under section 659B of the Corporations Act, private parties to a takeover no longer have the right to commence civil litigation, or seek injunctive relief from the courts in relation to a takeover, while the takeover is current.
As well as this matter, the firm announced to the ASX that director John Larsen has opted to step down from the board effective immediately. Larsen has sat on the board for the past five years and was formerly its chair until April 2024 when he was replaced by Charles Sweeney.
AUTHOR
Laura Dew
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It couldn't happen to a more worthy organisation - good luck to the heroes coming to clean the place up!