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20-205MR ASIC obtains interim injunctions against James Mawhinney and appointment of provisional liquidators to Mayfair debenture issuer
ASIC has obtained interim orders in the Federal Court of Australia against companies in the Mayfair 101 group and their director, James Peter Mawhinney, including the appointment of provisional liquidators to M101 Nominees Pty Ltd, the issuer of the M Core Fixed Income Notes promoted by Mayfair 101.
On 13 August 2020, the Court appointed Said Jahani and Philip Campbell-Wilson of Grant Thornton as provisional liquidators of M101 Nominees, pending an application by ASIC to wind up M101 Nominees on just and equitable grounds. ASIC alleges that M101 Nominees has been involved in breaches of the corporations legislation, and there is a justifiable lack of confidence in the conduct and management of its affairs that gives rise to a risk to the public that warrants protection.
In particular, ASIC alleges that M101 Nominees raised approximately $67 million from investors through debentures called the M Core Fixed Income Notes, based on representations that there would be security for the full amount invested. ASIC further alleges that those funds were not fully secured, and consequently, M Core Fixed Income Note investors may be unable to recover the full amount of their principal investment.
The provisional liquidators will provide a report to the Court by 24 September 2020 about the provisional liquidation of M101 Nominees, including identifying its assets and their value, and providing an opinion as to solvency and the likely return to creditors if the company is wound up.
On 13 August 2020, the Court made additional interim orders restraining Mr Mawhinney, and any company of which he is an officer or shareholder, from:
- Receiving or soliciting funds in connection with any financial product;
- Advertising or promoting any financial product; and
- Removing from Australia any assets acquired with funds received in connection with any financial product.
These orders apply to all products currently offered by Mayfair 101, including the M Core Fixed Income Notes, the M+ Fixed Income Notes and Australian Property Bonds, as well as any other financial product.
The Court also restrained Mr Mawhinney from leaving Australia until further order.
The Court made interim orders restraining Sunseeker Holdings Pty Ltd, of which Mr Mawhinney is a director, from dealing with the units in 14 trusts which hold property at Mission Beach and Dunk Island in Queensland. The units in those trusts are part of the security held on behalf of investors in the M Core Fixed Income Notes.
At a hearing on 2 September 2020, the matter was adjourned for a further case management hearing on a date to be fixed.
ASIC’s investigation is ongoing.
On 3 April 2020, ASIC commenced separate proceedings in the Federal Court against companies in the Mayfair 101 group, including M101 Nominees, alleging that those companies made statements in advertisements that were false, misleading or deceptive (20-080MR). On 16 April 2020, following an application by ASIC, the Federal Court made interim orders restraining Mayfair Wealth Partners Pty Ltd (trading as Mayfair Platinum) and Online Investments Pty Ltd (trading as Mayfair 101) from promoting their debenture products, including the M Core Fixed Income Notes, and prohibiting the use of specific words and phrases in their advertising (20-092MR). The matter is set down for a hearing commencing on 28 September 2020.
Investors in the M Core Fixed Income Notes can contact the provisional liquidators by emailing M101@au.gt.com
Moneysmart.gov.au has information on investing, including on debentures, secured notes and unsecured notes.
On 7 September 2020, the matter was listed for a case management hearing on 23 September 2020.
Editor's note 2:
On 23 September 2020, the case management hearing was adjourned to 30 September 2020.
Editor's note 3:
On 29 September 2020, an interlocutory application filed by Mr Mawhinney listed for hearing on 30 September 2020 was adjourned to a date to be fixed. The matter was listed for a case management hearing on 22 October 2020.
Editor's note 4:
On 26 October 2020, the matter was listed for hearing on 1 and 2 February 2021.
Editor's note 5:
The hearing of this matter will now proceed on 3 and 4 February 2021.
Editor's note 6:
On 29 January 2021, the Court ordered that M101 Nominees be wound up on just and equitable grounds, after the defendants consented to those orders being made (21-012MR). ASIC’s application for permanent injunctions against Mr Mawhinney will be heard by the Court on 15-17 February 2021. The hearing listed for 3-4 February 2021 has been vacated.
Editor's note 7:
ASIC’s application for permanent injunctions against Mr Mawhinney was heard by Justice Anderson on 16 February 2021. The matter will return to Court on 9 March 2021 for closing submissions.
Editor's note 8:
Closing submissions were heard by Justice Anderson on 9 March 2021 in relation to ASIC’s application for permanent injunctions against Mr Mawhinney. Judgment has been reserved.