(June 19): A £300 million portfolio of mortgages linked to collapsed lender Market Financial Solutions Ltd (MFS) looks to never have been registered with public property records, according to court filings, threatening to complicate lenders’ efforts to establish their claims over the underlying assets.
Twinwin Ltd, a company within the wider network of MFS companies, held the mortgage portfolio, but didn’t appear to register the loans, according to the documents, filed on Thursday as part of a petition to liquidate the company. Registration is generally required to protect a lender’s interest in a property and establish priority over other claims.
MFS was at the centre of a sprawling group of companies that borrowed from backers including Barclays plc and Apollo Global Management Inc’s Atlas SP Partners. The London-based firm, which was supposed to use the money to finance short-term real estate loans, collapsed amid allegations of wrongdoing and fraud.
The filings highlight the hurdles facing liquidators unwinding MFS, as they seek to trace and locate assets and maximise recoveries for creditors. One of the allegations of fraud involving MFS was that the firm obscured the true ownership and security position of assets.
Earlier this year, officials overseeing the insolvency alleged Twinwin was a vehicle used “to siphon-off monies” and was directed by MFS chief executive officer Paresh Raja.
While Twinwin was legally owned by accountant Khemenand Hurhangee, he held his shares on trust for Raja and acted on Raja’s instructions in relation to the company, the liquidators alleged in the court filings.
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A spokesperson for Raja declined to comment. Raja has previously denied any wrongdoing.
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