Boss of £2bn shadow bank accused of fraud has assets frozen

Core Viewpoint - The owner of Market Financial Solutions (MFS), a £2 billion shadow bank, has been accused of serious fraud, leading to a worldwide asset-freezing order against him following the company's collapse [1][3]. Company Summary - MFS has been placed into administration amid allegations of fraud, with a judge describing the claims as "very serious" [3]. - The company was funded by borrowing from itself rather than taking deposits, characteristic of shadow banks [7]. - High-profile banks, including Santander, Wells Fargo, Jefferies, and Barclays, were involved with MFS before its collapse [7]. Allegations and Legal Proceedings - Paresh Raja, the owner, is accused of using fake companies to defraud creditors, with claims that some clients presented as genuine borrowers were actually connected to MFS [4]. - Creditors allege that lending to connected borrowers and double-pledging collateral resulted in a £1.3 billion hole in MFS's accounts [5]. - Legal representatives for Raja have denied the allegations, asserting no intention to defraud and claiming he did not benefit from any shortfall [6]. Asset-Freezing Order - Raja is required to disclose assets exceeding £10,000 and is restricted from spending more than £5,000 weekly without administrator consent [2][8]. - The asset-freezing order has been ratified by courts in London and Dubai, emphasizing the seriousness of the situation [2][3].