ASIC succeeds in winding-up Mayfair 101 debenture issuer
The Australian Securities and Investments Commission (ASIC) today announces that, following its application, the Federal Court has ordered the winding up of M101 Nominees Pty Ltd. This is the entity which issued secured debentures promoted by Mayfair 101 known as M Core Fixed Income Notes.
The Court’s order marks the first final outcome arising from ASIC’s court actions issued against Mayfair 101 Group companies and their director James Mawhinney. In this action, ASIC sought to protect the assets of M101 Nominees and the interests of M Core noteholders in circumstances where:
- the product issuer had informed current investors of a liquidity event;
- there appeared to be insufficient funds to repay investors; and
- external administrators appointed to other products issued by the Mayfair 101 Group had raised concerns about how the investments had been dealt with to the detriment of investors.
On 29 January 2021, the Court appointed Said Jahani and Philip Campbell-Wilson of Grant Thornton as liquidators. They had previously been appointed them as provisional liquidators in order to preserve the assets of the company pending the determination of ASIC’s winding up application.
M101 Nominees raised approximately $67 million from investors during 2019 and 2020 based on representations that funds invested would be fully secured, when they were not. M101 Nominees stopped repaying funds to investors in March 2020 and froze interest payments to investors from June 2020.
The defendants consented to the orders made by the Court.
The Mayfair 101 Group owes approximately $211 million to those who invested in its various products, including the M Core Fixed Income Notes, M+ Fixed Income Notes, the IPO Wealth Fund, IPO Capital and Australian Property Bonds.
The regulator is also seeking orders that Mr Mawhinney, be permanently restrained from certain activities, including advertising any financial product and soliciting funds in connection with any financial product. That matter will be heard by the Court on February 15, 2021.
Let’s recall that, in 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.
On April 16, 2020, following an application by ASIC, the Federal Court issued 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.