The founder of collapsed lender Market Financial Solutions (MFS) is facing allegations that he diverted more than £1.3bn of borrowed funds to support a personal property empire and luxury lifestyle, according to a lawsuit reported by Bloomberg.
Administrators winding down the business claim Paresh Raja (pictured) channelled funds raised from major backers, including Barclays and Apollo Global Management, into accounts he controlled across multiple jurisdictions.
They allege the money was used to build a property portfolio worth around £950m and to accumulate personal wealth of at least £408m.
According to Bloomberg, court filings accuse Raja of orchestrating “fraud on a vast scale, backed up by systematic dishonest reporting”, with “vast sums” diverted for his own benefit.
The claim also alleges that lender funds were used to finance a collection of high-end vehicles, including Ferraris, Rolls-Royces and Aston Martins.
MFS, which had borrowed around £2.6bn to fund its bridging loan activities, entered administration in February following pressure from creditors. Its collapse has added to wider concerns around risk exposure within the private credit market.
Administrators further allege that company structures were deliberately fragmented to limit internal oversight, and that large sums — sometimes between £10m and £30m — were transferred directly to accounts linked to Raja. The filings also claim that tens of thousands of documents were deleted.
A spokesperson for Raja told Bloomberg that he denied the allegations, stating that there was “no fraud or dishonesty” and that assets in question were held through nominee structures for the benefit of MFS and its creditors.
