Company director behind Dunk Island tourism revitalisation plan hit with 20-year ban

Ambitious plans to transform Mission Beach and Dunk Island in Far North Queensland appear to be over with Mayfair 101 company founder James Mawhinney banned from fundraising and advertising financial products for 20 years.

Mawhinney, the driving force behind Mayfair 101’s purchase of Dunk Island and hundreds of properties at Mission Beach has been found to have engaged in what the Australian Securities and Investments Commission (ASIC) said was "misleading and deceptive conduct".

In a Federal Court judgement on Monday, Justice Stewart Anderson agreed with ASIC’s allegations about Mawhinney, advising that he had a "total disregard for the Corporations Act and the ASIC Act".

The Mayfair 101 group purchased a resort on Dunk Island in 2019, as well as almost 200 properties in the town of Mission Beach, 2.5 hours drive south of Cairns, as part of a plan to turn them into holiday rentals.

The company launched a slick advertising campaign and threw lavish promotional event on the island and in Mission Beach, promising investors high returns.

However, the plans collapsed as the cyclone-damaged island was repossessed and several legal challenges were launched by investors, some of whom lost their life savings.

Passing judgement on Monday, Justice Anderson stated "Mr Mawhinney's conduct can accurately be described as reprehensible conduct which demonstrates a complete disregard for financial services laws.

"And as a consequence, places the public at great risk of financial loss should Mr Mawhinney not be restrained.”

Justice Anderson also expressed concern about what had become of the funds invested and whether Mawhinney "stands to benefit personally from those schemes".

However, while noting Mawhinney had not been the subject of a criminal conviction, nor was there any evidence that the alleged had engaged in "conscious dishonesty or an intent to defraud", Justice Anderson banned Mawhinney from advertising investments and seeking or accepting funds from the public in connection with financial products for 20 years in Australia.

ASIC Deputy Chair Karen Chester said the judgement demonstrated "firms need to do the right thing by their investors.

"The court has shown that Mayfair 101 engaged in misleading and deceptive conduct by claiming its products were comparable to bank term deposits, which they were not

"The online advertising is misleading by claiming to offer products that involve less risk, when in reality, investors could lose some or all of their investments.

"Advertisements also claimed investors could get their invested money out when they wanted but that was not the case."

Mayfair 101 was last month found guilty of making false, misleading and deceptive statements while advertising its investment products.

A penalty hearing in that case is scheduled for July.

Image: Mayfair 101 promotion for Dunk Island.