Shadow bank founder battles to stave off bankruptcy threat Luke BarrWed, August 12, 2026 at 5:11 PM UTC 0 Paresh Raja has been accused of ‘plundering’ Market Financial Solutions in order to fund a lavish lifestyle The founder of a collapsed shadow bank is battling to stave off the threat of bankruptcy as lenders step up efforts to recover their debts. Paresh Raja has launched a legal claim to prevent administrators of Market Financial Solutions (MFS) from chasing him for repayment.
Shadow bank founder battles to stave off bankruptcy threat
Luke BarrWed, August 12, 2026 at 5:11 PM UTC
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Paresh Raja has been accused of ‘plundering’ Market Financial Solutions in order to fund a lavish lifestyle
The founder of a collapsed shadow bank is battling to stave off the threat of bankruptcy as lenders step up efforts to recover their debts.
Paresh Raja has launched a legal claim to prevent administrators of Market Financial Solutions (MFS) from chasing him for repayment.
Lawyers at Mishcon de Reya on Tuesday applied to the High Court to set aside a so-called statutory demand made by insolvency experts who are representing some of Mr Raja’s creditors.
A statutory demand is a formal request for repayment, and it can be a precursor to a bankruptcy petition if debts are not repaid.
The legal wrangling follows the spectacular collapse of MFS earlier this year. Mr Raja has been accused of “plundering” the business to fund a lavish lifestyle, including claims that he used cash to buy a series of supercars.
Administrators investigating the company have alleged that at least £1.3bn was “misappropriated” from MFS and remains unaccounted for.
Mr Raja and his wife allegedly received more than £408m from “funds managed by MFS” to “personal bank accounts” in the UK, Monaco, Singapore and the United Arab Emirates. They deny wrongdoing.
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MFS was a so-called shadow bank, meaning it borrowed money to then lend out. The Mayfair-headquartered company described itself as a specialist provider of buy-to-let mortgage lending and bridging finance.
The company’s demise shocked the City and has left some of the world’s biggest banks, including Barclays and Jefferies, exposed to hundreds of millions of pounds of losses.
Creditors have deployed a variety of different legal tools to pile pressure on Mr Raja. He was hit by a worldwide freezing order earlier this year, which barred him from spending more than £5,000 a week without creditors’ consent.
The statutory demand was filed by insolvency experts at Begbies Traynor and Coots and Boots, which are acting as administrators for parts of the collapsed MFS business.
It has previously been reported that Begbies Traynor is pursuing Mr Raja for £366m in loans he allegedly extracted from a vehicle called Market Financial Solutions International Ltd. That entity is listed as one of the parties in the latest dispute.
Mr Raja has repeatedly denied the allegations against him and rejected any suggestion of fraud.
Mr Raja declined to comment. Begbies Traynor was contacted for comment.
Source: "AOL Money"
Source: Money
Published: August 12, 2026 at 08:18PM on Source: RED MAG
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