UK Police Freeze Accounts Linked to Collapsed Shadow Bank MFS Amid £1.3bn Fraud Claims

City of London Police secured freezing orders against several bank accounts tied to Market Financial Solutions (MFS), a British shadow bank that collapsed amid allegations of a £1.3 billion fraud, filings by administrators revealed. The orders were set aside in July; administrators did not disclose why they were obtained or lifted. Founder Paresh Raja allegedly received more than £400 million from "funds managed by MFS" into personal accounts in the UK, Monaco, Singapore and the United Arab Emirates, according to a separate lawsuit. Raja has denied wrongdoing and maintained there was no fraud or dishonesty. The frozen accounts belonged to special-purpose companies owning properties linked to MFS; some creditors allege the properties were bought through nominee companies with MFS money held for Raja's benefit, claims he contests. The City of London Police confirmed it is not investigating MFS's collapse and referred the matter to the Financial Conduct Authority, which has opened an enforcement investigation. The Financial Reporting Council is probing three accountancy firms that worked for MFS, and the Prudential Regulation Authority has requested information from backers including Barclays, Santander, Wells Fargo and Jefferies.