Nothing rings warning bells more than daily full-page advertisements in the Financial Review. But when it comes to investment firm Mayfair Platinum — an investor-facing subsidiary of the Mayfair 101 group — there appears to be more red flags than a North Korean military parade.
Mayfair Platinum’s website notes that the firm is the “new face of investment” with its site boldly offering incredible fixed interest yields for investors, ranging from 3.65% for three months to a whopping 6.45% for five years. Compared to the 2% you’d get in a term deposit, these are mouth-watering rates indeed.
Mayfair 101’s About Us page claims that the business “was established in 2009 and has assets spanning 10+ countries across a diverse range of sectors, including financial services, wealth management, technology, property and emerging markets”.
This claim seemed curious, given an ASIC search reveals that Mayfair Wealth Partners (trading as Mayfair Platinum) was only incorporated in 2014 (and has lodged a total of only six documents since then with ASIC in five years).
Similarly, Quattro Capital, of which Mayfair is the authorised representative, was incorporated in 2013. IPO Wealth, a subsidiary of Mayfair, boasted in April that it had raised more than $100 million from investors two years after it had been founded.
In September, the firm garnered headlines when it agreed to pay $32 million to acquire cyclone-ravaged Dunk Island. The cost to develop the Queensland island is likely to run into the hundreds of millions of dollars, with even sophisticated tourism operators struggling to get a strong return in the region. It doesn’t appear that Mayfair has any experience developing holiday resorts. Dunk’s former owner, Peter Bond, paid only $7.5 million for the island.
But that’s not the only curious thing about Mayfair.
The business’ founder and public face is James Mawhinney. Mawhinney is described by Mayfair as being “an experienced business builder who is focused on creating win-win outcomes for investors, clients, suppliers and staff [who] has previously been CEO of an ASX-listed digital media group and has worked on merger and acquisition and investment transactions totalling over US$2 billion over the past five years alone, generating substantial value for shareholders”.
Let’s break down that CV. Mawhinney’s ASX experience came after he bought a digital marketing business called PositionMeOnline from his father in 2011. Mawhinney would later back-door the position into an ASX-listed business called Reeltime Media. Reeltime Media appeared to be an attempted roll-up of digital marketing agencies, although its ambitious were cruelled by an inability to raise capital to fund the expansion plans.
It seems Mawhinney’s tenure at Reeltime was neither particularly long nor particularly successful. He was appointed a director of the business on August 1, 2014, and held the job until July 20 the following year. The business was placed in administration in April 2015, around eight months after Mawhinney had been appointed to the board. Mawhinney appeared to be the highest paid employee of the business in 2014/15, receiving $267,354.
This would appear to cast some doubt on the “substantial value” he allegedly created for shareholders. Reeltime’s 2015 Annual Report noted that the business lost $952,729 in 2014, followed by a loss of $2,439,866 in 2015 before it was placed in administration by ASIC. We reviewed Reeltime’s annual reports dating back to 2011, and it appears the business never made a genuine profit in that time.
Between spending hundreds of thousands of dollars on advertisements and a founder involvement in a company that was wound up by ASIC, it would appear that Mayfair has some questions to answer.
Adam Schwab is the author of Pigs at the Trough: Lessons from Australia’s Decade of Corporate Greed.