‘Still a very long road’: Mayfair announces Mission Beach reboot
The founder of embattled investment firm Mayfair 101 has revealed the human cost behind the disastrous collapse of a Far North tourism venture while announcing a reboot of the fraught project.
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THE founder of embattled investment firm Mayfair 101 has revealed the human cost behind the disastrous collapse of a Cassowary Coast tourism venture during a visit to Mission Beach to reignite the fraught project.
From the company’s Porter Promenade office, that had power restored last week after being unoccupied since May 2021, Mayfair 101 managing director James Mawhinney spoke candidly about the personal impacts of a year’s long battle with the national finance regulator, the devastating effect on out-of-pocket investors and hopes the Federal Court will overturn a $30m fine and 20-year ban on advertising financial products.
At the centre of Australian Securities and Investments Commission action was a Federal Court ruling in December 2021 that found Mayfair entities engaged in misleading or deceptive conduct when promoting the M+ and M Core fixed income notes.
“I’ve demonstrated that, while from a legal standpoint, I believe that we did anything wrong,” he said.
“We act always on legal advice and compliantly but my actions spoke louder than anything (and) I’ve committed to getting people their money back. That’s what we’re here to do.”
In 2019 Mayfair 101 announced a $1.6bn plan to redevelop the cyclone-ravaged Dunk Island resort and invest in the purchase of 200 Mission Beach properties.
The sale of the Dunk Island lease went unconditional in September 2019 and the acquisition of 230 properties worth $48m followed – partly financed through sale of notes to 600 investors.
Things came unstuck in April 2020 when ASIC kicked off proceedings against Mayfair 101 for misleading or deceptive advertising.
Mr Mawhinney plans to appeal a $30m fine and 20-year ban on advertising financial products imposed by the federal court at a five day hearing slated to begin on August 22 after Justice David O’Callaghan granted a stay on alleged breaches of the ban last week.
Justice O’Callaghan found “there is no evidence that Mr Mawhinney had engaged in any of the conduct” alleged by ASIC.
Mr Mawhinney claimed a Federal Court pause on contempt proceedings was a significant “win” for Mayfair 101 investors.
With $211m is still owed to investors, the Bond family having repossessed Dunk Island after Mayfair defaulted on payment, a $14.2m bridging loan from Napla so far accruing an interest bill of almost $10.5m and ongoing court action, bringing the company back from the brink won’t be easy.
Mr Mawhinney insists it can be done.
“There is still a plan to resume the project. I say that with eyes wide open (but) we’re not there yet,” he said.
“The capital required to reboot the Mission Beach tourism project can come from several sources that Mayfair 101 has access to.
“There is considerable equity in the real estate and this can be released with a combination of institutional funding and overseas fundraising activities that have no impact on the 20-year ban.
“The outcome of the appeals in August is of high importance but not essential to the continuation of the project.
“We’ve managed to take legal steps to protect a lot of the key assets (and) we’re starting to get on the front foot by filing proceedings against different organisations that we think have done the wrong thing.”
And Mr Mawhinney has an unlikely ally in his corner in the form of investors desperate to recover lost life savings.
Cairns-based investor Bruce Golightly who lost $1m after sinking his life savings into the “secured” M Core debenture product met with Mr Mawhinney last week.
“ (Mr Mawhinney) and his team (are) the only people actively trying to help with our plight and expose what can only be described as an absolute travesty of justice,” he said.
Mr Golightly in a bulk email to noteholders encouraged investors to lodge formal complaints with ASIC.
“Unfortunately, it is still a very long road in front of us (and) the success of the appeals is absolutely crucial,” he wrote.
Having heard, often first-hand, about the catastrophic impact on investors including a suicide attempt, marriage breakdowns and ruined retirees Mr Mawhinney acknowledged ongoing hardship.
“That gives an individual like me a lot to fight for,” he said.
“Because the damage that this catastrophe could otherwise cause permanently would be the nightmare.
“There would be people jumping off buildings as a result.”
Mr Mawhinney declined to reveal how a 20-strong legal team enlisted to fight ASIC had been paid.
“All I’ll say is that we have various funding sources and I can’t disclose them because that is part of litigation,” he said.
Having already lost his family home in Perth Mr Mawhinney is not only fighting for his life, he’s battling for redemption in the eyes of the law and the finance sector after being dubbed as the man behind a “fantasy island” revival of the jewel in the crown of the Cassowary Coast.
“It’s a disaster that ultimately someone needs to be held accountable for.
“If the courts decide that that’s me, so be it, but I don’t think that’s going to be the case,” he said.
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Originally published as ‘Still a very long road’: Mayfair announces Mission Beach reboot
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