The NZ regulator is keeping a close watch on Sargon NZ after a related Australian holding company fell into receivership last week.
In a statement, the Financial Markets Authority (FMA), said the regulator “is aware of the situation and we are gathering information to understand how Sargon NZ may be impacted by the receivership”.
Sargon became one of a handful of licensed supervisors in NZ through its late 2018 purchase of the Heritage Trustee Company.
Renamed last September as Sargon (NZ), the company has picked up a few supervisor roles in the previously static trustee space, winning the back-office business for start-ups Kōura Wealth, Kernel Wealth – challenger brands in KiwiSaver and passive investing, respectively – and non-bank deposit taker, Christian Savings.
A spokesperson for the Melbourne-headquartered Sargon said the underlying businesses – including its NZ operations – were not affected by the receivership.
“Sargon Capital Pty Ltd is a holding company,” a statement posted on the group’s website says. “Its operating subsidiaries are not in any form of external administration and Sargon’s role and services as trustee, supervisor and custodian are unaffected by the appointment and continue to operate as normal.”
The statement says all boards, management and operational staff remain in place “including all trustee entities”.
But late in January Sargon chairs on both side of the Tasman resigned. Sargon Australia chair, Robert Rankin, left for reasons unrelated to the legal actions, the company says, while his NZ counterpart, Richard Hanna, exited on January 21. Hanna had served on the board of Heritage Trustee (now Sargon NZ) since 2017. The Melbourne-based SC International Holdings 2 Pty Ltd is named as the ultimate holding company of the Sargon NZ entities.
“Contrary to some media reports today, neither Sargon Capital Pty Ltd nor any of its subsidiaries have appointed administrators and these entities are not in voluntary administration,” the release says.
Sargon creditor, Hong Kong-based insurance company Taiping Trustees, triggered the legal action to recover secured debt.
“We are working with McGrathNicol and the secured creditor to seek to quickly agree on a constructive solution for all parties,” Sargon says. “We will provide further updates as the matters progress towards a resolution.”
However, the debt spat spilled over to the ASX-listed investment administration firm, OneVue, which is in the process of selling its trustee arm, Diversa, to Sargon. In November last year OneVue altered the Diversa sale agreement, deferring a large part of the A$43 million settlement until May this year.
OneVue is in a trading halt pending the announcement or until the ASX opens this morning (Monday February 3). A further report on the fallout in Australia is available here.
Australian press also reported Sargon co-founder, Aron D’Souza, launched legal action in January against Philip Kingston and related company, Trimantium.
Kingston co-founded Sargon with D’Souza and currently heads the acquisitive fund and superannuation administration business. D’Souza is seeking deferred payments of about $2 million, according to Australian media reports, from the sale of his Sargon shares in January 2019.
Sargon first attempted to crack the NZ market in 2017 in a reputed $200 million takeover deal of the Andrew Barnes-owned Bath Street Capital, which controls the Perpetual Guardian group of companies held under the Complectus vehicle.
The Bath Street deal, however, collapsed into a series of bitter legal disputes that took years to resolve. Sargon later bought the small NZ Trust Company, following that up with a $10 million purchase of Heritage in 2018.
Heritage reported a loss of almost $3 million over the 12 months to March 31 last year.