Bust shadow bank’s empty coffers spark hunt for missing £2bn

Tom SaundersSat, September 26, 2026 at 7:00 AM UTC

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Paresh Raja, Market Financial Solutions’ founder, has denied any allegations of fraud or dishonesty

Less than £1m has been recovered from the ashes of Market Financial Solutions (MFS) as creditors chase £2.3bn owed by the collapsed shadow bank.

AlixPartners, which has been carrying out the administration of MFS, has so far recovered only about £700,000 from loan book collections and the sale of computer equipment, motor vehicles and furniture.

The relatively paltry sum suggests steep losses for MFS’s creditors. Lenders and suppliers to MFS are owed about £2.3bn with an uncertain level of return, according to the latest administrator’s report shared amongst creditors.

That is higher than an earlier estimate of £1.8bn of debts.

Administrators are gearing up to go after Paresh Raja, MFS’s founder, believing this is the only realistic way to recover any meaningful sums.

MFS fell into administration in February, triggering allegations that at least £1.3bn has been “misappropriated” from the business.

Mr Raja and his wife allegedly received more than £408m from “funds managed by MFS” into “personal bank accounts” in the UK, Monaco, Singapore and the United Arab Emirates.

The allegations were made in a lawsuit brought by some of the shadow bank’s creditors, including Barclays, Santander, Wells Fargo and Jefferies.

Mr Raja strongly denies the allegations and has consistently maintained that there was no fraud or dishonesty.

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MFS was a shadow bank, meaning it funded its loans by borrowing from banks and other lenders. It described itself as a specialist provider of buy-to-let mortgage lending and bridging finance.

According to the latest administrator’s report, MFS’s accounts showed loans in its own name with a book value of roughly £190m. However, a review concluded that the real value is probably far lower.

AlixPartners said the recovery of roughly £28m in bridging loans is believed to be uncertain, while £11m in buy-to-let loans are considered more collectable.

However, competing claims mean that even collected loan interest is expected to be fought over several other parties related to MFS.

AlixPartners is already engaged in a fight with Barclays more than an estimated £13m held in a bank account in MFS’s name. Barclays, which manages the accounts, has so far refused to return the funds.

The joint administrators have brought a claim against the banks to get them to release the funds.

However, AlixPartners noted that a number of other parties involved in the collapse of MFS have also taken similar steps.

Proprietary software, which MFS paid roughly £7m for, failed to solicit interest from any bidders and administrators have concluded it is worthless.

So far, fees of roughly £8.9m for AlixPartners have been approved, but are yet to be drawn down. A further £5m in fees is yet to be approved.

AlixPartners declined to comment.

Original Article on Source

Source: “AOL Money”