The FAAA’s Phil Anderson has said the delisting of E&P Financial Group won’t stop the company coming under scrutiny in the inquiry into Dixon Advisory.
Anderson, who is the general manager for policy, advocacy and standards at the Financial Advice Association Australia, discussed the fate of E&P on a member webinar.
E&P announced on 24 September that it intends to delist from the ASX and will hold an extraordinary general meeting for a vote on 24 October.
Shares in E&P have been declining and the firm says it does not believe support remains for shares in the company in light of regulatory proceedings and class action litigation which have weighed on the firm.
An inquiry into Dixon Advisory – of which E&P is the parent company – was proposed earlier this month, and the Senate economics references committee is scheduled to report by the last sitting day in March. Subject to a shareholder vote, E&P has proposed to delist the company from the stock exchange on 9 December.
Anderson said: “Their message seems to be that their share price has gone south, they don’t think it’s got prospects of going up anytime soon, no one likes them and they’ve carried too much of the glare from all this regulatory and class action stuff.
“I don’t think they will avoid scrutiny. I think there will be less scrutiny going forward if they are not required to report to the ASX. But in terms of this parliamentary inquiry, it doesn’t matter if they are listed or not. The Senate economics committee will, as a result of these terms of reference, be having a very close look at the action of Dixon Advisory and therefore its parent company E&P Financial Group.”
The FAAA has been publicly pushing for an inquiry to take place as the company’s collapse has had a significant impact on the financial advice sector and on its share of the levy for the Compensation Scheme of Last Resort (CSLR).
E&P Financial Group previously outlined delivering value for shareholders through a focus on operating efficiency and capital management among its strategic core pillars for FY25. This followed the resolution of legacy issues and a business rationalisation completion.
Chief executive Ben Keeble said: “The board considers that the delisting is in the best interests of shareholders and that value creation can be best achieved in an unlisted environment. The ongoing administrative, compliance and direct costs associated with maintaining the listing of the company’s shares on the ASX are disproportionate to the benefit obtained by remaining listed. Moreover, EP1’s shares are highly illiquid, and the group has limited requirements for incremental capital.
“Furthermore, the board considers that the company will have greater flexibility to pursue and execute value-enhancing strategic opportunities following the proposed delisting.”
The board will propose an equal access off-market share buyback at $0.52 per share, conditional on the delisting being approved, as well as an entitlement offer in the first half of 2025 with capital raised to be applied towards refinancing the short-term debt facility.”
