In a statement, ASIC said that following an investigation, Mayfair 101 managing director James Mawhinney has been arrested and charged with four counts of engaging in dishonest conduct in the course of carrying on a financial services business.
The corporate regulator alleged that on four occasions between 9 August 2019 and 21 April 2020, Mawhinney dishonestly misrepresented to the trustee of the IPO Wealth Fund, that the IPO Wealth Group owned two Italian companies, Poveglia S.R.L. and Retta S.R.L, when it did not do so.
The maximum penalty for each charge of dishonest conduct is 15 years’ imprisonment.
Following an appearance at the Melbourne Magistrates’ Court, Mawhinney was granted conditional bail including that he be required to remain in Australia.
Mawhinney will next appear before the Melbourne Magistrates’ Court on 28 June 2024.
In a statement, Mawhinney said he will defend the charges brought against him by ASIC.
“I have been advised by my lawyers not to talk about the case,” Mawhinney said.
“I refer to what Mr Richter KC said today in court: ‘We expect to defeat these charges, and then we will consider bringing a case for malicious prosecution. Further, we want to put it on record that there is no harm alleged by the charges.”
The latest development comes after the investment group resumed payments to lenders in February.
In a statement at the time, the firm said interest payments for the December 2023 quarter have been made in full to more than a dozen IPO Capital lenders.
Mayfair launched IPO Capital in 2015 as a funding vehicle for the group’s private equity investments that it sought to take public, before transitioning it to the IPO Wealth Fund, a managed investment scheme operating under an Australian Financial Services Licence (AFSL).
Mawhinney originally received a 20-year ban from promoting and raising funds through financial products in April 2021, following proceedings brought by ASIC in August 2020.
However, this was overturned on appeal by unanimous decision of the full bench in September 2022, though it was remitted to a lower court and is now scheduled for a two-week trial in October 2024.
ASIC subsequently issued an amended concise statement to initiate the remitter trial and introduced fresh claims, including a request to ban Mawhinney as a company director and pecuniary penalties which were not previously sought.
The regulator’s attempt to change its original case was rejected in October 2023 by the Federal Court’s Justice O’Callaghan, who found that the matter remitted related only to the question of whether a ban from dealing in financial products should be imposed.
The Federal Court subsequently ordered ASIC to pay Mawhinney’s legal costs for his successful application to confine the remitted case.
ASIC and Mayfair 101 were also in Federal Court on 8 March relating to this case, after ASIC allegedly sought to drop reliance on what Mayfair described as “key evidence and witnesses” from the re-running of the historic proceeding.
