The high-profile fund manager behind failed plans to redevelop Queensland’s Dunk Island and nearby Mission Beach, James Mawhinney, has been handed a 20-year ban from offering financial products by the federal court.
The court found that investors – including retirees who were sold the products as alternatives to term deposits, a former Nationals MP and Pauline Hanson’s One Nation political party – stand to lose a combined $211m raised by companies run by Mawhinney since 2016.
The 140-page federal court judgement against Mawhinney repeatedly describes his conduct as “reprehensible”.
“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 Stewart Anderson ruled.
Guardian Australia first reported in 2019 that Mawhinney’s flagship company Mayfair 101 had bought Dunk Island and pledged to purchase more than 200 properties on the mainland, at Mission Beach, to support ambitious redevelopment plans.
The following year, the Australian Securities and Investments Commission took action against financial products offered by Mawhinney’s companies, which it alleged were marketed via “misleading” and “deceptive” advertisements and websites.
Soon afterwards the property purchases in Mission Beach were suddenly put on hold, leaving sellers in the lurch; and Dunk Island was repossessed.
Asic had sought a permanent ban against Mawhinney. The court has instead ruled Mawhinney and any of his companies be banned for 20 years from soliciting or receiving funds connected with a financial product, or advertising any financial product.
He is also banned from transferring any assets out of Australia “received directly or indirectly” connected with any financial product for 20 years.
“There is nothing to suggest that Mr Mawhinney has any appreciation of the conduct that he has orchestrated and engaged in, and the financial harm that he has caused to investors in his products,” Anderson found.
“Mr Mawhinney has expressed no contrition or remorse for the very significant loss of investors’ funds, despite the apparent acceptance in Mr Mawhinney’s submission that investors will not receive ‘dollar for dollar’ redemption.
“In light of the evidence and findings I have made in this proceeding, it can be stated that Mr Mawhinney has a total disregard for the law and compliance with financial regulation.
“On the evidence, across the various funds, the amounts raised from investors are in excess of … $211m. On the evidence before the court, there is a substantial likelihood that most, if not all, of those investors will never be repaid their principal or interest.”