Creditors including Barclays, Jefferies, Wells Fargo, Apollo’s Atlas SP Partners, Santander, and Elliott Management are facing an alleged shortfall of £1.3 billion following the collapse of the specialist mortgage lender Market Financial Solutions. The scale of the potential loss has sent a shockwave through the private credit market and triggered urgent investigations by regulators and law enforcement.
The firm, known as MFS, was placed into administration in February 2026 after its primary banking provider, Barclays, froze its accounts. Barclays, which had an exposure of approximately £600 million to MFS, had initially blocked some transactions in late 2025 after spotting irregularities. The bank’s action precipitated a collapse that has left some of the world’s most sophisticated financial institutions scrambling to assess their losses.
A Web of Entities and Alleged Double-Pledging
At the heart of the creditors’ allegations is a bafflingly complex corporate structure and the serious accusation of “double-pledging”. According to creditor claims filed with administrators, Paresh Raja created a web of entities, many registered under the names of Greek and Roman gods, to house loans. The central allegation is that MFS used its own loan book as collateral to secure financing from these large institutions, but then allegedly pledged the same collateral multiple times to different lenders.
This practice, if proven, would mean the same pool of assets was promising security to several creditors simultaneously, massively inflating the available collateral on paper. Furthermore, creditors allege that eight companies presented as genuine borrowers from MFS were in fact closely connected to Raja himself, suggesting a scheme to extract funds under false pretences. Some listed directors and shareholders of these corporate borrowers also held positions at MFS’s accountants, Magus Chartered Accountancy.
The joint administrators for MFS, AlixPartners UK LLP, were appointed after creditors cited “serious irregularities” and took over the administration process. The UK’s Financial Conduct Authority has launched an enforcement investigation into the firm. MFS operated as an “Annex 1 business,” meaning it was only supervised by the FCA for anti-money laundering rules, not for broader conduct or financial soundness.
Global Connections and a Worldwide Freeze
The fallout from MFS’s operations extends beyond its Mayfair headquarters. The firm backed dozens of property deals linked to Saifuzzaman Chowdhury, a former land minister in Bangladesh. Chowdhury amassed a UK property portfolio estimated to be worth around £170 million comprising over 300 properties. In June 2025, the UK’s National Crime Agency froze 342 properties linked to him, worth about £185 million, as part of an ongoing civil investigation.
Paresh Raja, the founder and public face of MFS, is now in Dubai. Courts in London and Dubai have hit him with a worldwide freezing order. He is required to detail all assets worth over £10,000 and is barred from spending more than £5,000 per week without the administrators’ consent while accusations of fraud are investigated.
Raja denies any wrongdoing. His lawyers have stated that “mistakes have been made but there has been no intention to defraud whatsoever” and that he has not been the beneficiary of any shortfall. They assert the claims stem from “fundamental misunderstandings and incorrect assumptions”.
From ‘Disruptor’ to Administration
Raja founded MFS in 2006, positioning it as a nimble provider of bespoke bridging loans and buy-to-let finance for clients who struggled to secure funding from mainstream banks. The firm grew rapidly, reporting a turnover of £71 million by 2024 and an institutional loan book estimated at over £2.3 billion. It raised capital through private investors and institutional warehouse facilities from global banks.
In 2025, Raja was named “Disruptor of the Year” by a media group, an accolade that now rings hollow. Just months later, in December 2025, employees attended a lavish black-tie Christmas party at the five-star Peninsula Hotel, an event later described as a “last hurrah”. By January, the firm was unravelling.
The collapse has amplified warnings about the booming but opaque private credit market, which some analysts have called a multi-trillion dollar risk. Jamie Dimon, CEO of JPMorgan Chase, has warned that more “cockroaches” might emerge in the wake of MFS’s collapse, a reference to similar allegations of double-pledging in the US collapses of First Brands Group and Tricolor Holdings in late 2025. The Bank of England has reportedly requested information from lenders regarding funds extended to MFS, expressing concerns about the adequacy of due diligence conducted by the institutions now facing heavy losses.
