The Financial Conduct Authority has opened an investigation into collapsed mortgage lender MFS amid allegations of fraud.
Market Financial Solutions Limited, which is based in Mayfair, London, entered administration last month owing billions.
A worldwide asset-freezing order has been imposed on founder and CEO Paresh Raja (pictured), who is based in Dubai, by administrators AlixPartners. He is limited to spending 拢5,000 per week without consent.
鈥淲e have opened an enforcement investigation into Market Financial Solutions Limited (MFS),鈥� said the FCA.
MFS is an 鈥楢nnex 1鈥� business, which is solely registered with and supervised by the FCA for its compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
Annex 1-registered firms are not authorised or subject to wider FCA regulation.
MFS provided property-related loans and it has been accused of fraud and wrongdoing by creditors including Barclays, Santander, Jefferies, Elliott Management and Atlas 鈥婼P Partners, which are collectively 拢1.3 billion down.
Creditors have alleged that beneficiaries of mortgages from MFS included Raja himself聽 as part of a structure that 鈥渕ay have been a device designed to extract monies 鈥� on false pretences鈥�.
MFS has also been accused of 鈥榙ouble pledging鈥� – where security is granted to two or more financial institutions at the same time over the same property.
Raja鈥檚 lawyer has previously told the Daily Telegraph: 鈥淢istakes have been made but there has been no intention to defraud whatsoever and Mr Raja has not been the beneficiary of any shortfall (if any) there may be.鈥�