Paresh Raja, owner of Market Financial Solutions Ltd. (MFS), faces a growing wave of lawsuits as creditors seek to recover around £2.3 billion ($3 billion) in loans after the UK property lender collapsed amid allegations of widespread fraud.
Raja’s lawyers say he is under pressure to respond to as many as six lawsuits in the UK High Court. Creditors including Barclays Plc and Apollo Global Management Inc.’s Atlas SP Partners unit backed the sprawling group of entities that made up MFS. Many are now in administration and pursuing litigation, with some accusing Raja of looting hundreds of millions of dollars and funding an extravagant lifestyle.
Raja’s legal team described “internecine warfare” among creditors, urging them to coordinate rather than file increasingly urgent applications across multiple fora. Officials winding down MFS itself have sued Raja for £1.3 billion. In his first detailed response, Raja denied acting dishonestly or in bad faith.
One MFS entity, London Bridging Ltd., alleges Raja misappropriated more than £200 million. Two other entities, Amber Bridging Ltd. and Zircon Bridging Ltd., may recover as little as 9 to 13 pence on the pound for creditors. Administrators for Market Financial Solutions International Ltd. have issued statutory demands against Raja for £278 million, while Interlend Holdings Ltd. demanded £28 million.
Stephen Katz of BTG Begbies Traynor confirmed the claims, and a spokesperson for Alix Partners declined to comment.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing