Key facts
- Natwest provided banking services to Twinwin, a company allegedly used by MFS founder Paresh Raja.
- Twinwin was allegedly used to re-route cash from MFS vehicles, re-lending funds at marked-up rates with added fees.
- When loans were repaid, money was allegedly returned to Twinwin's account and not to original investors.
- Paresh Raja denies all allegations of wrongdoing.
- MFS collapsed in February, owing lenders over £1bn.
- Twinwin was placed into provisional liquidation on March 6.
Natwest provided banking services to Twinwin, a company allegedly used by the founder of collapsed property lender MFS, Paresh Raja, to divert investor funds. According to individuals familiar with the matter, Twinwin held the day-to-day account for the company, which was reportedly used to generate fees from clients' cash without their knowledge.
Legal filings indicate that Twinwin was allegedly used by Raja to "siphon off" money from investors and engage in "fraudulent wrongdoing." An insolvency court judge noted in March that Twinwin's relationship with MFS appeared to constitute a diversion of funds between MFS lenders and property owners.
Natwest's connection to Twinwin, previously unreported, could draw the bank into the Financial Conduct Authority's (FCA) ongoing investigation into MFS. Sources suggest the FCA's probe may extend to Natwest for its handling of Twinwin's accounts.
Insolvency rulings reveal that Twinwin was used to reroute cash from MFS vehicles backed by institutional investors. The alleged scheme involved Twinwin re-lending funds to borrowers at inflated interest rates with added intermediary fees. Upon loan repayment, the funds were reportedly returned to Twinwin's account instead of the original investors.
Raja's spokesperson stated that he "does not recognise" the characterization of Twinwin and "robustly denies all allegations of wrongdoing." MFS collapsed into administration in February, with debts exceeding £1bn, impacting several global financial institutions.
A Natwest spokesperson acknowledged awareness of the allegations but declined to comment on individual customers, stating the bank has "robust economic controls and procedures" and cooperates with authorities. Natwest has no direct credit exposure to MFS or its related entities.
Twinwin was placed into provisional liquidation on March 6, with FRP appointed as official liquidators on June 18. FRP has been in communication with the FCA regarding Twinwin's liquidation. Despite channeling tens of millions of pounds and holding multi-million pound property portfolios, Twinwin's last filed accounts listed only two employees.
The FCA's investigation into MFS, based in Mayfair, includes accusations of "double pledging" property assets as collateral for multiple loans. Other institutions under scrutiny include Barclays, Jefferies, Santander, and private credit lenders like Elliott Management, Castlelake, and Apollo's Atlas SP Unit. Barclays provided banking services for MFS's central operating entity and held over £160 million belonging to the MFS operating unit and silos at the time of its administration.