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Slam Dunk: Court brings down curtain on resort island scheme

Business

The $67 million scheme at the heart of plans to develop Dunk Island and Mission Beach has been finally brought to an end by the Federal Court.

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The court ordered the winding up of M101 Nominees Pty Ltd, which issued secured debentures promoted by Mayfair 101 known as M Core Fixed Income Notes, after an application from the Australian Securities and Investments Commission.

The debentures were part of a scheme to raise funds for the development on Dunk Island, which has since been repossessed.

Mayfair 101 also bought almost 200 properties across Mission Beach as part of plans to turn them into holiday rentals.

ASIC alleged that M101 Nominees raised approximately $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.

ASIC further alleged that those funds were not fully secured, and consequently, M Core Fixed Income Note investors may be unable to recover the full amount of their principal investment.

This is the first final outcome arising from ASIC’s court actions issued against Mayfair 101 Group companies and their director James Mawhinney.

The Federal Court ordered that M101 Nominees be wound up on just and equitable grounds, and appointed Said Jahani and Philip Campbell-Wilson of Grant Thornton as liquidators.

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.

On 24 September 2020, the provisional liquidators concluded that: M101 Nominees had been insolvent since it began in October 2019 and the business model was unsustainable.

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