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Incredible facts

Below is a list of facts about Mayfair 101 which explain why the intervention of Australian Parliament is required.

Fact 1

ASIC did not request interviews with Mr Mawhinney, Mayfair 101's management or its staff as part of its investigation. No interviews were conducted prior to issuing proceedings.  Four years later ASIC has not interviewed Mr Mawhinney.  An interview was critical for ASIC to understand the business model, investments, products and profile of Mayfair's lenders, yet this did not occur.

Fact 2

ASIC did not request Mayfair's financial statements, asset registers, investment liquidity profile, business plans, financial models or development plans. These documents were critical for assessing the underlying business, yet they were not requested.

Fact 3

Former Deputy Commissioner Karen Chester led the campaign against Mayfair 101 despite not being responsible for enforcement. It is public knowledge Ms Chester wanted the Chairperson's role and was prepared to "destroy" people to get there. Ms Chester has been referred to the National Anti-Corruption Commission by at least one party other than Mayfair.

Fact 4

Mayfair's credit history was impeccable at the time ASIC acted. No complaints were made to ASIC or AFCA by any Mayfair lender. There were no defaults at the time ASIC acted.  The chronology shows ASIC's actions triggered a series of defaults.  ASIC sought to blame Mayfair for the harm caused by those defaults when Mayfair did not cause them.

Fact 5

ASIC told the Federal Court of Australia that Mr Mawhinney had transferred investor money to the British Virgin Islands. Three years later they have still been unable to produce a bank statement showing any such transfers occurred.

Fact 6

ASIC told the Federal Court of Australia that Mr Mawhinney was operating multiple Ponzi schemes.  Mayfair's lawyers blasted ASIC for the false accusation.  ASIC's own MoneySmart website explains a Ponzi scheme has no real investment.  Mayfair held over half a billion dollars worth of assets.

Fact 7

Liquidators for the IPO Wealth division of Mayfair 101 alleged Mr Mawhinney had transferred assets and cash to the British Virgin Islands.  The trustee alleged millions of dollars had been removed from the fund.  In March 2024 a settlement was announced which sees the liquidators abandon all claims and relinquish control of 80 per cent of the assets in favour of Mayfair.

Fact 8

ASIC told the Federal Court that Mission Beach was a "heap of sand" and the redevelopment of Dunk Island was a "pipedream".  Four years later, the "heap of sand" has risen in value by $170 million.  

Fact 9

The Australian Financial Review labelled Mayfair a 'fund manager' and 'funds management business' more than 100 times across 50 articles.  They were mistaken.  Mayfair was not in the business of funds management.  It did not provide a service to manage people's money on their behalf.

Fact 10

Two journalists from the Australian Financial Review were awarded a Clarion Award for their coverage of Mayfair 101. They collected the award in September 2020, prior to any court case against Mayfair concluding.  They have written over 120 stories and yet never interviewed Mr Mawhinney. Their misunderstanding and misrepresentation of Mayfair's business has evidently contributed to ASIC's misconceived actions.  They should be returning their Clarion Award before it is stripped from them.

Fact 11

ASIC targeted Mayfair as part of its 'true-to-label' campaign which was led by Karen Chester.  This campaign was directed at fund managers.  Yet the products (promissory notes) offered by Mayfair were not a fund. The products have contrastingly different characteristics to manage funds.  The journalists overlooked this in their error-ridden reporting, and ASIC did the same in their regulatory campaign.

 

Fact 12

ASIC categorised a media release on its website about Mayfair as relating to 'managed investment schemes' (which means 'fund managers'). Yet Mayfair was not a funds management company.

Fact 13

ASIC's Head of Investment Managers Rhys Bollen presented Mayfair 101 as a case study on 'fraud' at the 'How to pick a fraud' event in November 2020. The event was for fund managers, yet Mayfair's products were not a fund.  Mr Bollen holds the following legal qualifications:

  • Bachelor of Laws (Honours) - University of Technology Sydney

  • Masters, Business Law – University of Sydney

  • International Law - University of Cambridge

  • Masters business Administration – Melbourne Business School

  • PhD, Business, Law - RMIT University
     

Mr Bollen was sufficiently qualified to understand (a) Mayfair's promissory notes were not a fund, (b) his actions presenting Mayfair as an example of 'fraud' was in contempt of court considering two Federal Court cases were on foot at the time, and (c) ASIC made no allegations of fraud against Mayfair. 

The webinar can be viewed here. At 5:37mins Mr Bollen explains ASIC's concerns relate to funds. It is inexplicable how ASIC allowed Mr Bollen to make this public presentation when it was prejudicial to the interests of Mayfair 101 and its lenders and was so deeply mistaken.

Fact 14

On 27 November 2019 the short-seller who was long-term friends with the Deputy Commission Karen Chester sent her a speculative email saying his "spidey-sense" was going off badly about Mayfair.  Within 12 hours a Public Warning Notice was drafted despite no investigation being open, no checks being done and the claims being entirely speculative. Ms Chester's career aspirations explain a lot.

Fact 15

Mr Mawhinney was banned for 20-years from dealing in financial products.  The Full Court unanimously overturned this ruling finding ASIC's case was "mistaken", "absurd" and was a "fundamental denial of procedural fairness".

Fact 16

ASIC's told the Federal Court that the mere appearance of contraventions, rather than actual contraventions, was sufficient to ban Mr Mawhinney for life from dealing in financial products. The court of appeal overturned this decision.

Fact 17

ASIC's officers telephoned numerous Mayfair 101 lenders in early 2020 to ask if they were prepared to give evidence to support their case.  Several Mayfair lenders described their actions as 'trying to put words in their mouth'. When ASIC filed their case in April 2020, there were no affidavits from Mayfair's lenders because no lender was prepared to support ASIC's case.

Fact 18

In 2020 Mayfair obtained formal resolutions from 120 unitholders in the IPO Wealth Fund. 96 per cent of unitholders by value voted in favour of removing the trustee, ending the provisional liquidation and returning control of the 17 companies to Mayfair. ASIC overrode the unitholder's wishes and yet it was not ASIC's money at stake.

Fact 19

In May 2024, 82.2 per cent of lenders by value voted on removing receivers from 15 unit trusts which previously held Mayfair's real estate portfolio.  The receivers were appointed in breach of the terms of the trust deed which the trustee was responsible for and without the support of a single lender. 

Fact 20

Mr Mawhinney has sued Deputy Commissioner Sarah Court and ASIC for defamation.  The case will continue after the remitted trial in 2024 is concluded.

Fact 21

The average Mayfair 101 client loaned 15% or less of their net wealth to Mayfair.  ASIC held out that its actions were designed to protect the public from harm without realising the average Mayfair lender, even if they were to suffer a capital loss, were not significantly exposed.

Fact 22

The laws of Australia Parliament (as confirmed on ASIC's own website) require that Chartered Accountants determine whether a client satisfies the 'wholesale investor' test. ASIC sought to impose an onus on Mayfair to assess the financial literacy of its lenders which did not exist at law.

Fact 23

ASIC obtained a $30 million penalty against four Mayfair entities in a matter which was undefended at trial.  It was undefended because ASIC had de-funded Mayfair by obtaining injunctions.  The allegations have never been contested in court and yet ASIC considers this as a significant win.

Fact 24

ASIC's actions have triggered more than 25 court cases.  This extraordinary amount of litigation has been required to protect the interests of Mayfair's lenders.  It has consumed millions of taxpayer dollars and unnecessarily diverted the resources of Australia's judicial system to deal with the fallout.  Most importantly, Mayfair's lenders have been without principal and interest payments for more than four years due to the immense amount of ongoing litigation delaying the group's rebuilding efforts.  

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