One Nation loses $500K to troubled investment company

One Nation made a $500,000 payment to a troubled investment company responsible for the stalled Dunk Island redevelopment project. Investigations editor Ross Jones reports.

ONE NATION has just taken a $500,000 bath.

The party’s periodic return to the Electoral Commission of Queensland for the period 1 January 2020 to 30 June 2020 shows someone in One Nation tipped half-a-mil’s worth of small donors’ hard-earned cash into a classic, built-for-mugs, too good to be true investment opportunity.

The scheme in question goes by the name of Mayfair Platinum, part of a group of entities under the umbrella of IPO Wealth, all controlled by one James Mawhinney.

Mawhinney’s Mayfair website bio claims he has an LLB and BCom and alleges he ‘has been in leadership roles from a young age’.

IPO announced it had $75 million under management in December 2019.

IPO made its bucks by offering investors very attractive interest rates, several per cent over bank rates, then lending this money out to private start-ups and fringe businesses at a massive margin over borrowing cost.

IPO also took an equity stake, so if the business borrower/client makes money despite the steep interest rate on its debt and can be sold, IPO and therefore Mawhinney, who owns the lot and hangs out in the Caymans, keep the change.

Back in early 2019, specialist investment site Sharecafe said of IPO:

In summary, IPO Wealth has a very unique business model and resembles more closely a private equity group. They entice investors with cash enhanced term deposits then lend this money out at a higher rate and collect the difference, in turn receiving all of the upside from an unlisted private equity portfolio and NONE OF THE DOWNSIDE. None of which is illegal of course. But IPO Wealth’s alignment of interest with investors has to be questioned. Ultimately an investor should ask themselves whether they are being rewarded for the risk they are taking, because where their investment dollars ends up ultimately is with an unlisted emerging company. And that’s a very different risk profile than a liquid term deposit.

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These schemes always have a classic way of playing out, and this one was called Dunk Island:

‘A global private investment consortium forked out $31 million for the cyclone-ravaged island, but its vision goes well beyond rebuilding the resort.’

IPO planned to buy Dunk and half of Mission Beach, ultimately putting deposits on about 60 properties. It was to be a ‘tourism Mecca’.

Bob Katter thought it was a great idea.

As you can guess, it all went horribly wrong.

An ASIC media release stated:

‘On 11 March 2020, Mayfair Platinum suspended payment of capital redemptions to investors in the Mayfair debenture products due to liquidity issues.’

On 7 April 2020, The Guardian reported:

‘The corporate watchdog has launched legal action accusing the high-profile investment fund behind the redevelopment of Queensland’s Dunk Island resort of misleading and deceptive advertising by saying its products could be compared to bank term deposits.’

Things kept going downhill for Mawhinney and his empire. On 2 September, ASIC announced:

‘ASIC has obtained interim orders in the Federal Court of Australia against companies in the Mayfair 101 group and their director, James Peter Mawhinney, including the appointment of provisional liquidators to M101 Nominees Pty Ltd, the issuer of the M Core Fixed Income Notes promoted by Mayfair 101.’

ASIC also advised:

...the Court made additional interim orders restraining Mr Mawhinney, and any company of which he is an officer or shareholder, from:

Receiving or soliciting funds in connection with any financial product;

Advertising or promoting any financial product; and

Removing from Australia any assets acquired with funds received in connection with any financial product.

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According to ASIC, the Court told Mawhinney he could not leave the country, and:

‘...made interim orders restraining Sunseeker Holdings Pty Ltd, of which Mr Mawhinney is a director, from dealing with the units in 14 trusts which hold property at Mission Beach and Dunk Island in Queensland.’

One Nation’s $500,000 is not looking good.

The AFR reported:

‘Investors in Mayfair 101's $67 million secured notes have been told to brace for a total loss as a report filed by provisional liquidators claimed the company behind a highly publicised purchase of Dunk Island in Queensland was doomed from the start.’

How did such a fate befall One Nation’s hard-earned?

Equal parts stupidity and greed would be a good guess.

One Nation’s periodic return to the ECQ covered the period January to March 2020, so even if the $500,000 was dumped into Mayfair’s black hole as New Year’s resolution, all those funds of lucky PHON donors lasted, at most, two-and-a-bit months before the yawning mouth of reality opened wide.

Things must be ugly in the House of PHON.

The Guardian reported:

‘One Nation has angrily rejected claims the party could be left out of pocket due to a series of liquidations within the corporate group.’

The best line goes to libertarian finance-oriented publication Rum Rebellion:

‘One island sank One Nation.’

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An Australian headline noted:

‘Hanson's “total control fetish” belies fund ignorance claims.’

Most media persist with the flawed assumption that Pauline Hanson is in control of PHON. This has never been true.

Since 2015, control of PHON has segued from a cabal to a Svengali.

Pauline is the face, James Ashby is the little chap inside her head, pulling levers and turning wheels.

Even a cursory Google search for Mayfair conducted anytime before PHON’s ill-fated investment was made would have revealed a company seemingly defying gravity.

A November 2019 slackinvestor.com article concluded:

‘It may take some years, but this Mayfair 101 thing… it’s not going to end well for the punters!’

In December 2019, before PHON’s declared investment date, Livewire ran a story on Mayfair titled:

‘IPO Wealth/Mayfair Platinum — the scary end of the “rush” for yield.’

Whoever decided to tip half-a-mil into an obviously extreme risky Mayfair either ignored due diligence or was swayed by factors larger than mere financial issues.

Mawhinney is dead smooth. Believable if you believe that stuff.

Just like that chap in the Akubra who took James on a magical mystery tour through the American NRA and assorted sleazy nightclubs then showed the world just what One Nation get up to when they think no one is looking.

Investigations editor Ross Jones is a licensed private enquiry agent and the author of 'Ashbygate: The Plot to Destroy Australia's Speaker'. You can follow Ross on Twitter @RPZJones.