Having first drawn interest from the corporate regulator all the way back in April 2020, Mayfair 101 is once again paying lenders in its IPO Capital subsidiary.
In a statement, the firm said interest payments for the December 2023 quarter have been made in full to more than a dozen IPO Capital lenders.
Mayfair launched IPO Capital in 2015 as a funding vehicle for the group’s private equity investments that it sought to take public, before transitioning it to the IPO Wealth Fund, a managed investment scheme operating under an Australian Financial Services License (AFSL).
Mayfair 101 managing director James Mawhinney, who at one point was given a 20-year ban from advertising investments and raising funds from the public through financial products, said the resumption of interest payments after nearly four years is “in line with our objective of making all clients whole”.
“These clients supported our group’s investment activities since inception and we are delighted to achieve this significant milestone for them against all odds,” said Mr Mawhinney.
“We are working toward achieving the same for our noteholders and are grateful for everyone’s patience while we get this terrible situation sorted out.”
Long-term IPO Capital lender, Denny Bauman, commented: “Receiving interest payments again after everything that Mayfair 101 has endured over the past four years is testament to the integrity of James Mawhinney and his team. They have my full support and should be commended for standing up to the corporate regulator to protect the interests of their clients.”
Another lender, Marilyn Burton, said: “Full credit to Mr Mawhinney and his team for following through on their commitment to resume payments to us. It proves just how badly ASIC mis-assessed his character. ASIC should be compensating Mayfair 101 for the hundreds of millions of dollars’ worth of damage it caused by acting on conspiracies rather than properly investigating.”
The statement from Mayfair 101 added that further interest payments including redemptions are expected to resume “in the coming months as value is restored and funding becomes more accessible”.
Following Mr Mawhinney’s banning in April 2021, the court also ordered four companies within the Mayfair 101 group to pay a combined penalty of $30 million.
The Federal Court said at the time that James Mawhinney acted with “total disregard” for the Corporations Act and ASIC Act, and that his contraventions were “of a very serious kind and warrant a very substantial period of restraint”.
Mr Mawhinney appealed this decision, which was allowed by the Full Court, on the ground that he was denied procedural fairness.
The Full Federal Court overturned the 20-year ban in September 2022, though it was remitted to a lower court and is now scheduled for a two-week trial in October 2024.
In October 2022, the Full Federal Court dismissed the appeal which sought to overturn the findings of misleading or deceptive advertising, and the $30 million penalty.
The Full Court did, however, set aside orders made on 21 January 2022 restraining the Mayfair companies from using certain specified phrases such as “bank deposit” and “term deposit” in their advertising, marketing or promotion on the basis that this injunction was “too broad and unworkable”.
In November 2023, the Federal Court ordered the Australian Securities and Investments Commission (ASIC) to pay the legal costs of Mr Mawhinney after the corporate regulator failed to make a new case against the Mayfair 101 managing director.
The regulator’s attempt to change its original case was rejected the previous month by the Federal Court’s Justice O’Callaghan, who found that the matter remitted related only to the question of whether a ban from dealing in financial products should be imposed.
ASIC is now required to pay Mr Mawhinney’s costs of his successful application to confine the remitted case.
Following the win, Mayfair 101 said in a statement: “570 Australian lenders have been without principal and interest payments on their debt instruments after ASIC first targeted the group in early 2020.
“At the time, Mayfair 101 held over half a billion dollars’ worth of assets including over 130 investment properties in Australia, principal and interest obligations were current, and no Mayfair 101 client had made a complaint to ASIC.
“The recent court win for Mr Mawhinney is a significant step forward in his goal of ensuring all Mayfair 101 clients are made whole.”