Mayfair 101: ‘Worst loan ever’ a ‘fatal blow,’ court hears

The professional conduct of Mayfair 101 director James Mawhinney has been put under a microscope as the corporate regulator tries to ban the finance mogul from raising future funds.

The conduct of the man behind a multimillion transformation of Dunk Island is the subject of a Federal Court trial. Picture: Peter Carruthers

THE professional conduct of embattled Mayfair 101 director James Mawhinney has been put under a microscope during a Federal Court trial brought by the corporate regulator aimed at banning the finance mogul from raising future funds.

A packed online audience tuned in to hear the case to permanently restrain Mayfair 101 managing director Mr Mawhinney from advertising any financial product and soliciting funds in connection with any financial product.

Mayfair 101 founder James Mawhinney at Mission Beach.

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Counsel for the Australian Securities and Investments Commission Caryn van Proctor made damning allegations based on a Dye and Co provisional liquidator report.

She said the Mayfair 101 business model was “unsustainable” and Mr Mawhinney may be in breach of numerous Corporations Act clauses.

“The provisional liquidators advised that Mr Mawhinney did not accurately reflect their financial position,” she said.

“The disarray that the books were in (meant) the provisional liquidator could not make an accurate (assessment).”

Ms van Proctor said action had to be taken against Mr Mawhinney to protect Australian investors from conduct “inappropriate of a director”.

“(We) can have no trust in Mr Mawhinney in a manner that is compliant with the Act,” she said.

“Mr Mawhinney poses a significant risk to Australian investors.”

Mayfair Iconic Properties spearheaded the construction of beachside bar on Dunk Island in 2020 to form part of a Cassowary Coast tourism mecca.

The barrister defending the ASIC allegations, Will Newland, honed in on the loan Mayfair took out with Naplend to finance Mission Beach property acquisitions to create a $1.5bn Far Northern tourism mecca.

Mr Newland described the Naplend loan as “horrific” and “one of the worst loans you can ever imagine”.

“(It was) bad business management and poor decision-making to enter into the Naplend loan,” he said.

“The disastrous loan that has enriched Naplend was a fatal blow (to Mayfair).”

Mr Newland said Mayfair finance products did not operate as a Ponzi-like scheme and attempted to tender last-minute BAS records to prove revenue had been generated from sources other than new investor funds, however ASIC’s Ms van Proctor raised objections.

Final submissions in the trial are still to be heard.

Originally published as Mayfair 101: ‘Worst loan ever’ a ‘fatal blow,’ court hears