MFS founder accuses administrators of ‘internecine warfare’
The founder of collapsed shadow bank MFS has accused administrators of “internecine warfare” and harassment as the firm’s creditors fight to unlock billions of pounds in frozen funds, City AM can reveal.
Paresh Raja, the chief executive of Market Financial Solutions who has denied claims he siphoned “vast sums” from the mortgage firm, has asked the High Court to force all competing claims against him into a single, coordinated process.
Raja is currently facing five separate proceedings from MFS entities that top £1.5bn. Amber Bridging and Zircon Bridging – the creditor companies that forced MFS into administration – are understood to be preparing a sixth claim, according to legal filings seen by City AM.
“There appears to be a significant degree of internecine warfare, the effect of which has been to harass Mr Raja at every stage with increasingly ‘urgent’ applications and across a range of fora, as each entity seeks to get what it evidently perceives to be ‘ahead’ of the others,” lawyers representing Raja said in court filings.
The filings also accused administrators of “advancing competing, and overlapping and/or inconsistent, claims to what appears to be the same pool of money”.
MFS – which operated as a UK non-bank lender that funded its loan book through institutional debt facilities – collapsed into administration in February 2026, owing institutional lenders over £1.1bn. Raja has been accused of operating a double pledging scheme, whereby he allegedly used identical property assets as collateral for multiple, simultaneous loans from different major lenders, creating a major shortfall.
A source familiar with the matter said: “The multiplicity of claims is clearly a reflection of the case and the way in which [Raja] structured MFS”.
The fight for MFS’ cash
Multiple different administrators have been handed control of different special purpose vehicles in the MFS web of companies. The legal filings from Raja are in response to a claim from London Bridging Limited, which administrators from FRP have taken over.
FRP are seeking to claw back around £51m in funds, which has been reduced from £242m previously.
Administrators are also locked in a legal battle with Barclays to retrieve funds they claim belong to them that have been frozen by the bank. Barclays held a dual role in the MFS ecosystem, acting as both a lender and providing primary transactional bank activities.
City AM was the first to reveal Barclays was holding in excess of £160m belonging to the operating unit and silos at the time of the administration. It began freezing MFS accounts in November 2025 after spotting irregularities.
Raja has blamed the bank for the collapse of MFS, and in separate filings accused it of “paralysing” the business when it froze accounts.
Barclays has said it “acted at all times, and continues to act, in accordance with its legal and regulatory obligations”.
FRP declined to comment. Amber and Zircon declined to comment.