The Australian Securities and Investment Commission (ASIC) has obtained interim orders in the Federal Court of Australia today against companies in the Mayfair 101 group and their director James Mawhinney.
The orders include the appointment of provisional liquidators to M101 Nominees, the issuer of M Core Fixed Income Notes which Mayfair 101 was restricted from promoting back in April.
Said Jahani and Philip Campbell-Wilson of Grant Thornton have been appointed as provisional liquidators of M101 Nominees, pending an application by ASIC to wind up the company on just and equitable grounds.
ASIC alleges M101 Nominees has been involved in breaches of 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".
Specifically, ASIC alleges M101 Nominees raised $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.
Further, the watchdog alleges those funds were not fully secured, meaning investors may be unable to recoup the full amount of their principal investment.
Grant Thornton will now provide the Court with a report identifying M101 Nominees' assets, their value, and providing an option as to solvency and the likely return to creditors if the company is wound up.
With regard to Mayfair 101 founder and managing director James Mawhinney, the Court made orders restraining him 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 Mawhinney from leaving Australia until further orders.
In addition, Sunseeker Holdings has been restrained on an interim basis from dealing with units in 14 trusts which hold property at Mission Beach and Dunk Island in Queensland.
The injunctions follow an ongoing legal stoush between Mawhinney and ASIC after the watchdog commenced proceedings against the Mayfair 101 founder back in April.
ASIC was initially successful in restraining Mayfair 101 from promoting its debenture products and prohibiting the company from using specific words and phrases in its advertising.
The Court declined to restrain Mayfair from issuing and accepting new investments in the Mayfair debenture products.
The final decision on that matter is set down for a hearing commencing on 28 September 2020.
Additionally, on 23 June restructuring firm Cor Cordis was appointed as the voluntary administrator of Mayfair 101's IPO Wealth Holdings.
The move followed the appointment of voluntary administrators to IPO Wealth Holdings in June by Vasco Trustees after two repayments were missed.
Mayfair 101, the group behind a $1.6 billion redevelopment of Dunk Island in Far North Queensland, said the decision to appoint voluntary administrators was made in order to protect IPO Wealth Fund investors from the liquidation of the assets held by IPO Wealth and its subsidiaries.
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