Panel declares 'unacceptable circumstances' for Sequoia

The Takeovers Panel declared that rogue shareholders, which include Glennon Capital, seeking to gain control of Sequoia Financial Group were not transparent about their relationship and breached substantial shareholder laws.

In an update to the ASX relating to the ongoing battle for leadership and control of Sequoia, the panel said the actions by the shareholders that acquired substantial amounts of shares that increased their voting power in a short space of time led to circumstances that "were unacceptable because (among other things) there have been contraventions of s606..."

Section 606 the Corporations Act prohibits on certain acquisitions of relevant interests in voting shares.

The combined voting power of the group - Unrandom, A. Jones Group, and Glennon Capital in Sequoia increased from about 22.2% to 27.84%.

Sequoia alleged that between 31 March 2024 and 10 May 2024, the rebel shareholders sought "to change the composition of its board and to control or influence the conduct of Sequoia's affairs".

They allegedly failed to fully disclose the identity of those they are associated with; the nature of their association; and the extent of their collective voting power in Sequoia.

They also purchased additional Sequoia shares resulting in increases in collective voting power above 20% in Sequoia in contravention of section 606 the Corporations Act.

Shareholder Anthony "Tony" Jones and his controlled entities Cojones and Vonetta (or A. Jones Group) own over 17 million Sequoia shares or 12.94% of the voting interest. His son, Brent Jones, and his company Unrandom have over 10 million shares or 8.15%.

Glennon Small Companies chair Michael Glennon owns more than eight million shares or 6.57%.

The cohort also wanted to remove chief executive Garry Crole and non-executive director Kevin Pattison as directors at an extraordinary general meeting (EGM) in June.

Shareholders voted in favour of Crole and Pattison keeping their positions, each securing over 60% of their votes, and rejecting Brent Jones and Peter Brook taking a seat on the board.

Yesterday, the panel declared that "the circumstances constitute unacceptable circumstances in relation to the affairs of Sequoia."

It also said that it appears the "unacceptable circumstances" affected the control or potential control of Sequoia and the acquisition or proposed acquisition by a person of a substantial interest in Sequoia.

The panel said it is still considering Sequoia's application for orders, which includes "the alleged associated parties give Sequoia a corrective substantial shareholder notice (in a form acceptable to the Panel)".