Red faces as Australian Banking Association lets James Mawhinney sponsor annual conference

Mayfair 101 CEO James Mawhinney leaving the Melbourne Magistrates Court in April, 2024. Picture: Luis Enrique Ascui

On what planet is James Mawhinney, architect of the Mayfair 101 debacle, a fit and proper sponsor of the Australian Banking Association’s national conference this week?

The ABA whisked down the sponsorship by Mawhinney’s Media.com only minutes after Margin Call started asking questions about it early on Tuesday.

But the fact that it was agreed to at all suggests a significant lapse of judgment by the banking association’s back office.

Mawhinney is facing four criminal counts of engaging in dishonest conduct, and is due to return to court in August. Multiple civil suits brought by the Australian Securities and Investments Commission have already established his culpability in the Mayfair 101 Group’s collapse, which caused the loss of about $211m of investor funds.

That’s a cracking look for the Sydney banking love-in, which was supposed to be serving as Anna Bligh’s last public hurrah and the opportunity to introduce incoming chief executive Simon Birmingham to his new bosses in the banking industry.

And the keynote speaker at the ABA’s “Navigating Disruption” conference? ASIC chairman Joe Longo, who we’re sure would have plenty to say on the subject if ASIC’s lawyers would let him. That’s probably unlikely given Mawhinney is also suing the regulator and deputy chair Sarah Court for defamation.

Mawhinney has fought allegations surrounding the collapse of Mayfair 101 all the way to the High Court, but Mayfair still lost multiple appeals against a $30m fine for false and misleading advertising related to its “investment” proposition.

As a quick reminder, Mawhinney rose to prominence in 2019 after unveiling plans for a $1.6bn redevelopment of Dunk Island and Mission Beach in Far North Queensland, raising cash to back the development from almost 130 investors following a national advertising campaign.

He’s been at war with ASIC for years after the regulator moved to shut down his would-be property empire.

The ABA picked ASIC chairman Joe Longo as the keynote speaker at a conference sponsored by long-time ASIC foe James Mawhinney. Picture: Martin Ollman

Only a week ago the Federal Court, in a rehearing of allegations that Mawhinney was directly involved in the group’s contraventions, found that he was.

Justice Catherine Button found that Mawhinney was involved or associated with five contraventions of the law in market loan notes associated with Mayfair developments, including multiple false or misleading representations between 2019 and 2020.

And far from some overreach or a conspiracy by the Australian Securities and Investments Commission, Justice Button found that his poor business judgment was responsible for the group’s collapse.

“The emotional and financial harm suffered by investors who have not been repaid must be devastating; words scarcely do it justice,” Justice Button said in her decision.

“While Mr Mawhinney has vociferously blamed a combination of Covid-19, ASIC and (Grant Thornton liquidator) Said Jahani for the outcome, he has to date not grappled with the vulnerabilities borne of the structures he established and the frenetic pace of property purchasing, coupled with a lack of hard analysis of cashflow and funding capacity.

“Mr Mawhinney’s relentless heaping of blame on others, coupled with his apparently complete lack of introspection, does not stand to his credit.”

We imagine there’s a fair bit of introspection going on over at the ABA over the blunder – probably at considerable volume.

ASIC is waiting for the outcome of a penalties decision by Justice Button, but the corporate watchdog’s attempt to ban him from involvement in soliciting money from investors and promoting financial products seems likely to be reinstated.

No criminal convictions, granted.

But the bankers due to appear on stage this week – ABA chairman and NAB bank boss Andrew Irvine, for example – need to satisfy the Australian Prudential Regulation Authority’s “fit and proper” test to hold their jobs. It’s a test we’re pretty sure Mawhinney wouldn’t meet.

Had Margin Call not raised questions about Mawhinney’s involvement, banking’s great and good would have been proudly presenting against the backdrop of a sponsorship list that touted his Media.com.

Mind you, they could easily have sought some advice on the advisability of the ABA’s sponsorship choice from APRA chairman John Lonsdale, who is also scheduled to deliver a keynote address at the event.

And it’s not as though Mawhinney tried to hide his involvement sponsoring the event. He even put out a press release this week touting his involvement.

“Becoming a sponsor of the ABA’s flagship event was a strategic priority for us given the challenges the banking industry is facing from the misuse of social networks to target consumers,” he said.

Mawhinney bought the domain name in 2023 and has since used it as a platform to try to launch his own social media site, which bills itself as a “next-generation online social network designed for people who value trusted content and verified engagement”. Would-be users must stump up official ID to join the platform, which Mawhinney reckons will stop the bots and combat misinformation.

The US-registered company claims to have raised more than $US30m from investors so far, which is probably how the company can afford to sponsor the ABA’s conference, albeit briefly.

We’re told any money Media.com might has stumped up to the ABA will be refused or returned.

There’s still not been any explanation so far as to how it happened in the first place, though.

It’s not Mawhinney’s first go around as a conference sponsor, either. Its Instagram page claims Media.com was a gold sponsor of the PRWeek UK awards in London in 2023, presenting an award for reputation management, of all things.

So it probably could have been worse for the ABA, we suppose. And, rather than holding the event in Sydney’s International Convention Centre, the ABA could have been running it on Dunk Island.