Island allegations have 'destroyed hundreds of lives'
THE COMPANY behind a failed $1.5bn proposal to transform a Cassowary Coast area into a tourism mecca has refuted allegations it transferred shares to an overseas firm to the detriment of investors, saying the "damnation" have destroyed hundreds of lives.
The embattled Mayfair 101 firm via a group of its investment entities, including IPO Wealth Fund, had proposed to redevelop Dunk Island and Mission Beach in a bid to inject a much-needed boost to the region's economy.
However, it was jeopardised after the Australian Securities and Investments Commission placed it in provisional liquidation and won freezing orders against Mayfair founder James Mawhinney during a Federal Court hearing last year.
One month later, the Victorian Supreme Court ordered IPO Wealth unit to be wound up after hearing allegations it operated like a Ponzi scheme.
On Monday, Mayfair stated it had published a "scathing" and 76-page "line-by-line" response, including bank statements, to Vasco Trustees Limited, the trustee of the IPO Wealth, and liquidators Dye & Co after it was alleged in a report last month that investors' shares were moved to a British Virgin Islands firm under Mr Mawhinnye's control.
"The group was brought into disrepute with allegations that Mr Mawhinney had made off to the British Virgin Islands with Accloud shares to the detriment of IPO Wealth's investors," the statement reads.
"However, bank statements enclosed in the response show a sobering reality."
Accloud PLC is the group's largest investment in technology.
The company said its publication highlighted the controversial nature of the court case, criticising ASIC's actions.
"(It) has consequently destroyed the investments and lives of IPO Wealth's 181 investors while placing in serious jeopardy the return of capital to the group's remaining 390 investors," it alleged.
"The response is a key step forward in exposing what occurred when Mayfair 101 Group and Mr Mawhinney came under attack in early 2020."
The company said Mr Mawhinney followed the trustee's direction to sell the group's shareholding in Accloud to 101 Investments Limited in exchange for cash payment to boost the liquidity of IPO Wealth.
Mr Mawhinney also contributed more than 8.4 million Accloud shares owned by his companies outside of IPO Wealth, representing 40 per cent of the total shareholding.
The purchase was settled for $19.5m and the proceeds used by the IPO Wealth to boost the income of the portfolio.
A net gain of more than $9m was generated for IPO Wealth Holdings from those investments in FY2020.
Mr Mawhinney alleged ASIC had accepted and supported Vasco and Dye & Co's report "without thorough investigation".
"[ASIC and] the court have publicly damned me and have brought our business and over 570 innocent Australian investors to their knees," he said.
The group's response also stated that Vasco and Dye & Co's report failed to reference the liquidators are now in control of the group's Venice-based real estate project after Mr Mawhinney voluntarily transferred its holding company to the liquidators.
Cairns man Bruce Golightly, who sunk $1m of his life savings into a Mayfair 101 investment product and is now facing financial ruin, said he hoped that the truth would get exposed.
"ASIC didn't even attempt to consult with Mayfair and now investors' funds are in jeopardy.
"The whole thing is an absolutely ironic situation involving the people protecting us," the 55 year old said.
Mr Golightly, who invested in the group's secured M Core debenture product, said he believed "more and more will come to light as time goes by".
Mayfair 101 is set to front a Federal Court winding-up hearing listed for February 1-2.
Dunk Island was repossessed by the Bond family after Mayfair failed to meet its payment obligations.
In December last year, Mr Mawhinney said a three-pronged restructure plan including Australian investment from a "syndicate of investors" could mean a return for noteholders currently facing a collective loss of $67m.
Dye & Co, Vasco and ASIC have been contacted for comment.
Originally published as Mayfair says allegations have destroyed hundreds of lives