Announced on Tuesday, HSG cited the "failure to resolve a variety of issues" had led to their decision, ending their ownership of the club after just 18 months.
It is the latest twist in an eventful week for the FFA, who announced the birth of a western Sydney team last Wednesday. The game's governing body axed Gold Coast United the next day, but now face the prospect of a nine-team competition.
Estimating their investment in the Jets at AU$12 million, a release from HSG - owned by mining magnate Nathan Tinkler - revealed their issues with the FFA included a dispute over the $5 million acquisition fee, the insurance matter over the decision to rescind former marquee Jason Culina's contract and a "continued request to address the competition’s unsustainable financial model".
In the release, HSG chief executive officer Troy Palmer said the company had simply "lost confidence" in the FFA, and that the decision - particularly with the members in mind - had been a tough one.
"It is also frustrating to have invested so much time, energy and money to save the Jets for the community at short notice and then continually hit road blocks at the FFA," Palmer said.
"It should never be forgotten that when we stepped in to save the club it was insolvent, there were only 500 members, diminishing crowds, minimal community engagement, no merchandise programme and negligible corporate support.
"During the 2011-12 season we believe we turned this around to be seen as leaders in all these areas.
"Unfortunately, having lost confidence in the FFA management and its ability to find a resolution, it is clear we have no other option.
"It is about removing ourselves from an administration in which we have an untenable relationship."
The issue over the acquisition fee seems to be the most prevalent, with reports the FFA had withheld their quarterly allowance to the club as more than half the $5m had yet to be paid.
"We have attempted to organise meetings with the FFA to discuss our $5 million acquisition fee, with our only condition being we must be advised what other clubs have paid, if anything, why acquisition fees vary, how much of a success fee was paid to the FFA's agent and how the money was used," Palmer said.
"Having rejected our terms on every occasion we had no confidence a consistent and rational explanation for the fee would be forthcoming, particularly after inflammatory media comments from the FFA."
Palmer said $1 million will instead be invested annually to encourage local children to play football in the region, and that the decision to hand the Jets licence back had no impact on the group's ownership of the Newcastle Knights in the National Rugby League or any of their other investments.