Court orders wind-up for Mayfair 101’s IPO Wealth Holdings
Mayfair 101’s IPO Wealth Holdings has been ordered to shut down, after a court heard it operated as a Ponzi scheme.
Investment house Mayfair 101, whose scheme to turn Dunk Island and Mission Beach into a $1.5bn tourism mecca is floundering, received a separate blow as a court ordered companies in its IPO Wealth Holdings unit be wound up.
The order was made by Justice Ross Robson in the Supreme Court of Victoria after hearings in which the corporate regulator intervened and the court heard allegations that the fund has operated like Ponzi scheme, with money from new investors used to pay those exiting.
Mayfair 101 Group managing director, James Mawhinney, who sought to stave off the wind up in a lengthy court battle, while also proposing rescue plans that drew fire for potentially transferring assets to companies he controlled, expressed disappointment with the outcome of the case.
He claimed the “proactive measures”, presented by Mayfair 101, would have generated a more favourable outcome for the 181 unit holders than a liquidation, despite independent court-appointed contradictors criticising his plans.
“As the founder of IPO Wealth I am devastated by the result. I have personally engaged with almost every single unit holder and have eternal empathy for the situation they now find themselves in,” Mr Mawhinney said.
The founder of the investment house said that “any claims” of impropriety were “categorically rejected” and said the legal proceedings denied him a right of reply on many allegations about the fund’s conduct.
The provisional liquidators of IPO Wealth, Dye & Co. this month warned investors in the fund they faced substantial losses. They said it was of “particular concern” that some holdings, including shares in Indian software company Accloud PLC and shares in the entities which own an island off Venice, Isola San Spirito, had been transferred out of the IPO Wealth group to other entities in the broader Mayfair 101 empire.
Dye & Co said “there will be a substantial shortfall to the Trustee”, Vasco, that is acting for unit holders. Mr Mawhinney claimed after the hearing that the Australian Securities and Investments Commission had taken an interest in Vasoc’s oversight of the fund.
A separate debenture scheme is backing the Dunk project but it has also run into strife and Dye & Co. had identified some links between them.
In a Federal Court case in August ASIC told the court that Mayfair 101 may have been running a Ponzi scheme. Mr Mawhinney was restrained from leaving Australia and the regulator alleged he may face criminal charges.
Mr Mawhinney has denied wrongdoing, saying the Dunk Island scheme will go ahead with backing from a group of wealthy investors.
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