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Administrators overseeing the insolvency of Market Financial Solutions have accused the collapsed lender’s owner, Paresh Raja, of misappropriating at least £1.3bn to fund a “lavish lifestyle” that included purchasing a “vast number” of luxury cars.
In a lawsuit filed against Raja at London’s High Court, MFS, which has been overseen by administrators acting on behalf of creditors since February, alleged their claim concerned the “systematic plundering of a multimillion-pound property finance business by the very man entrusted to lead it”.
The allegations of wrongdoing against Raja include receiving hundreds of millions of pounds of MFS funds into personal bank accounts, allowing “false reports” to be sent to lenders and instructing employees to destroy documents in the weeks leading up to its collapse.
The failure of MFS, which specialised in providing high-interest “bridging” loans against property, sparked losses for major banks such as Barclays and private credit firms including Apollo’s Atlas unit. Allegations of fraud following its insolvency have further stoked concerns around lax underwriting standards in the booming asset-backed lending markets.
Raja, currently in Dubai, is subject to a worldwide travel ban and asset freeze. Administrators alleged that his disclosures in response to this freezing order have been “inaccurate and incomplete”.
A spokesperson for Raja said that he “strongly denies the allegations” and “has consistently maintained there was no fraud or dishonesty”.
“Assets which the administrators characterise as missing were held through nominee structures for the benefit of MFS and its creditors, a position set out in detail to the administrators in March 2026,” Raja’s spokesperson added.
“Mr Raja’s ability to assist has been wholly frustrated by the administrators’ refusal to provide access to company and personal data, despite repeated requests. He will present his full account through the court process.”
In their lawsuit, MFS’s administrators estimate that at least £1.27bn has been misappropriated out of about £2.6bn borrowed from lenders. This estimate is based on an internal spreadsheet that appeared to provide “an accurate record of actual lending” at MFS, which listed only £1.18bn of outstanding mortgages, along with an additional £173mn held in corporate bank accounts.
The new lawsuit alleges that “multiple lenders were told that secured loans had been made against the same properties” and in some instances “the purported loan had not been made at all”.
The administrators alleged that Raja and his wife received more than £408mn to “personal bank accounts” in the UK, Monaco, Singapore and the United Arab Emirates from “funds managed by MFS”.
The lawsuit claims that Raja exploited MFS’s funds “as if they were his own to fund a lavish lifestyle”, having purchased “a vast number of cars” that included at least three Aston Martins, two Mercedes, six Ferraris and three Rolls-Royces.
Administrators also allege that MFS funds were used to purchase UK residential properties with a value of over £950mn that were owned by nominees acting “on behalf” of Raja. Lawyers for Raja have previously stated that these are “not sham companies” but “part of a larger group which are beneficially held for MFS and its associated lenders.”
The administrators claim that Raja also “instructed MFS employees to collect or deliver envelopes containing very significant volumes of cash”. In one alleged incident in 2022, Raja instructed an MFS employee to collect a box from an individual that contained £150,000 in cash, “without any explanation as to what the cash was for and why it was necessary for an MFS employee to collect it.”
The lawsuit also claims that “as the walls began to close in, Mr Raja sought to destroy the evidence of his fraud”, alleging that about 35,000 files were deleted from MFS’s Dropbox account in February, with some of these files deleted by an account linked to Raja’s email.
Administrators alleged that Raja had failed to explain what happened to the missing funds at MFS, but that “when asked where the missing money had gone [his lawyers] responded that ‘God only knows’.”
This article has been amended to reflect the fact the comment ‘God only knows’ was made by Raja’s lawyers
