Dunk Island repossession a setback to planned billion-dollar Mission Beach redevelopment

Developer James Mawhinney’s plans to build a billion-dollar resort at Queensland’s Mission Beach region appear to have be over after former owner Peter Bond repossessed the Dunk Island resort at the centre of the scheme.

As reported by Guardian Australia, Bond’s move came after the corporate regulator, which has been investigating Mawhinney and his investment group, Mayfair 101, for three years, obtained a court order freezing the assets of several entities associated with the project in Mission Beach, Queensland, and banning Mawhinney from leaving the country.

In legal proceedings, the Australian Securities and Investments Commission (ASIC) has accused Mawhinney of misleading investors in Mayfair 101, which has raised at least $140 million from the public, by claiming some of its offerings were similar in safety to a bank term deposit.

Separately, Mawhinney has also been accused in court of transferring potentially valuable assets away from the grip of investors and to a company in the British Virgin Islands, 101 Investments, of which he is the ultimate owner.

However, on Tuesday, Bond’s son, Adam Bond, told Guardian Australia the family’s company, Family Island Operations, had taken control of the island after Mayfair failed to meet payment terms.

He advised “unfortunately under the circumstances we have been left with no alternative but to foreclose.

“We have spent several months working with Mayfair in an attempt to engineer a solution. However, despite several extensions to payment terms Mayfair have remained unable to meet their obligations.”

The foreclosure is likely to have huge repercussions in Mission Beach, where some members of the community had hoped for an economic renaissance led by the redevelopment of Dunk Island and others had agreed to sell their properties to Mayfair 101.

Adam Bond added “we recognise the impact this decision may have on Mayfair investors and the Mission beach community.

“We can assure all concerned that this decision was not taken lightly or without other alternatives being thoroughly explored first.

“In our capacity as controller of the asset it is our intention to move quickly to ensure that Dunk Island can attract the right ownership to continue toward reopening and reestablishing its position as one of Queensland’s iconic destinations.”

Last Thursday, the Federal Court judge Stewart Anderson appointed Said Jahani and Philip Campbell-Wilson of Grant Thornton as provisional liquidators of a key Mayfair 101 company, M101 Holdings, and banned Mawhinney from promoting fixed-income notes that Asic had previously complained Mayfair had compared to bank term deposits.

Anderson also banned Mawhinney from leaving the country and froze the assets of 14 property trusts Mayfair 101 had used to buy land in and around Mission Beach.

He said that on the basis of material ASIC supplied to the court, which included the existence of a Monaco bank account in Mawhinney’s name, he was “satisfied that there exists a considerable risk of potentially fraudulent dissipation to the detriment of the relevant note holders”.

He went on to say that Mawhinney ought to be banned from raising further money from investors using the fixed-income notes due to several matters of “serious concern”.

These included the fact that as of 30th March M101 Nominees had received more than $67.5 million from investors, but by 1st July had just $2,765 in the bank; that investor funds were “used to fund a loan that was not adequately secured; that Mawhinney had stated a desire to restructure his companies to “protect our assets from recourse from receivers where practical”; and that ASIC feared the fundraising was “akin to arrangements colloquially referred to as a ‘Ponzi scheme’.”

Images: Dunk Island (top) and Mayfair 101's concept for Dunk Island (below). Images courtesy of Mayfair.