Prag's Property Emporium.
Pragnesh Modhwadia has admitted that the £64m which went walkabouts from Axiom Ince’s client account has already been spent.
Responding to the firm’s freezing order, which was revealed by RollOnFriday, its former Managing Partner told the court in an affidavit this week that some of the money was used to buy Ince and Plexus (and presumably Wiseman Lee, a small London firm acquired by Axiom Ince on 7 July), and that he spent millions more of it purchasing six properties and redeveloping seven others.
Axiom Ince’s barrister, Simon Passfield, said that £57m went missing from the firm’s client account between 2021 and 30 June 2023, and that since that date three more transfers had been made totalling £7m.
Modhwadia claimed that he only had tens of thousands of pounds left in his bank accounts, and Passfield said that Modhwadia’s affidavit contained an “astonishingly frank admission” that “not a single penny of [the £64m) is accounted for”, reported the Law Gazette.
Asked about Modhwadia's apparent admission that he spent all the money, his lawyer told ROF, "I am unable to comment".
The court widened the freezing order to £64m, and it also ordered injunctions to be placed on Modhwadia’s 13 properties to prevent them being sold.
RollOnFriday broke down the acquisitions listed on the court order to find out exactly what he got with his/clients' money. The results show that over the past 18 years, Modhwadia has amassed a portfolio encompassing a wide range of properties, from houses to shopping malls, office blocks, luxury London flats and development land:
Even Modhwadia’s neighbours have got wind of the scandal. One commented on ROF, “We live in the road in Radlett where Pragnesh is building the most (ridiculously) enormous house having demolished a bungalow”.
“They dug down 6m to put in an underground pool and complex…Work has been going on there for nearly 2 years. It all ground to a halt about 6 weeks ago."
"It’s worth noting that this is a small private road and the entire road objected to planning. Plus a new housing plan was in final draft with Hertsmere council, which seeks among other things to prevent distruction of bungalows to maintain a mix of housing stock. How he managed to get the council planning committee to support him nobody knows!”
Like Modhwadia’s property empire, work at Axiom Ince also appears to have ground to a halt. Staff told RollOnFriday that they now are being paid fortnightly, with the first instalment due today. There is “speculation that this will be the last pay we receive”, said an employee.
Another source told RollOnFriday that Axiom Ince has informed associates that there are no jobs for them in the future. It “seems they are pushing associates out to avoid redundancy pay-outs”, leaving lawyers “stuck or forced to accept jobs with worse packages and no compensation from Ince”, said the source.
ROF understands that a number of partners have already jumped to Norwegian firm Wikborg Rein, while there are also whispers that a group of employees is moving to Child & Child, where Ince's old bosses Adrian and John Biles are now in charge.
Axiom Ince has already failed to meet the invoices of some contractors, said one, who told ROF they were disgusted by their treatment.
Clients as well as staff have been left in the lurch, they said. “I have just read the article on your website about Axiom's missing client money”, said one.
“Axiom DWFM allowed us to exchange contracts on 07/09/23 with completion being set for 13/09/23. On Friday 08/09/23 I received an email saying that their client account had been frozen and they were unable to release monies for us to complete”.
“Now I am in a position where I am likely to lose the £15,000 deposit paid, [and] could have the vendor come after me for out of pocket expenses.”
“I have tried to telephone Axiom, but all their phone numbers ring twice and then the line goes dead, emails aren't being replied to and despite speaking to the Law Society and the SRA, no-one is able to help.”
Yet the spendy spirit of Modhwadia appears to live on in some quarters of the firm.
Even after the SRA intervened into Pragnesh’s practice, Axiom Ince's Dubai office placed a £4,500 deposit to hire the entire Jin Bo Law Skybar for a swanky shipping party this Monday, according to a source.
"How? How did they pay for this shit without knowing if they could pay staff and debts?" said the insider.
When ROF asked the firm if it really was throwing another ridiculous party, a spokesperson said “We can confirm that no payments have been made from Axiom Ince Limited to this venue in relation to an event”.
Prodded on whether a different Axiom Ince entity had made the payment, the firm grudgingly responded, “We can confirm that as per publicly stated at Companies House [sic], Ince & Co Middle East LLP is a separately registered and regulated entity to Axiom Ince Limited”. A Slippery Nipple for whichever Board Member came up with that media strategy (after the external crisis PRs all quit).
While staff are wondering why Modhwadia isn’t in custody, the Managing Partner of another firm expressed scepticism that it was the work of one person. “We have a firm of accountants updating our ledger all day every day”, he said. “I am genuinely shocked. It also means all our premiums go up – thanks, Pragnesh”.
There have been suggestions from staff that the SRA was not sufficiently involved given the gravity of legacy Axiom's situation, which follows the high profile implosions of both Ince, Plexus and the Metamorph group.
A spokesperson for the SRA told ROF that the regulator could not divulge when it knew millions was missing from Axion Ince, as the matter was a live investigation.
It's also not possible to ask the SRA's longstanding Executive Director of Investigation and Enforcement, Client Protection and Professional Ethics, Robert Loughlin, as he left rather suddenly in the summer.
The SRA's spokesperson said Loughlin's departure was unconnected to recent events, although the regulator appears to be in something of a crisis itself.
The management shake-up has seen Loughlin's duties spread between the remaining members of the SRA's Executive Committee.
And in a somewhat unusual arrangement, a partner at the SRA's go-to firm has stepped in to cover more of the gaps. Nimi Bruce, the head of Capsticks' regulatory practice, is now also the interim director of the SRA’s legal department.
"This is a temporary arrangement to meet business needs, whilst the current Director covers other roles”, said an SRA spokesperson.
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Comments
149
9
How on earth has this gone unnoticed for so long? It can't possibly be him alone.
180
11
As Prags has admitted to taking the money and can't account for it - why is he not in custody? Or is that all going on behind the scenes? The number of people shafted is unbelievable from employees to clients / contractors and the knock on effect on literally thousands of lives. I'm bemused that he is still (allegedly) walking the streets.
46
11
Res ipsa loquitur
149
10
Where is the SFO or Scotland Yard in all of this? Pragnesh appears to have openly admitted in court to spending millions of client account money on unrelated personal and business expenses - isn't that just fraud and theft? You'd think the authorities would jump at a confession like that!
The SRA is clearly not fit for purpose and their secretiveness doesn't help. We are left to speculate whether they are merely incompetent or also complicit. A sacrificial lamb or two won't solve anything, the entire body is a joke and needs to go.
91
10
Interpath
pinsent masons
macfarlanes
SRA
All equally culpable in this sorry state of affairs. And to think interpath have had the audacity to point the finger of blame at former plexus partners. If none of the above could work it out how the hell could anyone else??
tick tock you lot.
8
1
Praggy thinks it’s ok to steal £65 million of client money and use the proceeds of crime to acquire Ince and Plexus and several other properties. Surely, this needs to be reported to the Serious Fraud Office to take immediate action. Praggy deserves to be locked up behind bars for life!
44
60
ROF why do you need to attack the people who are still there and trying to clear up the mess? Why can’t the profession support those partners who have also been screwed over and who are now trying to help the staff and clients? The new management at Axiom Ince were shoved into their roles and are working their backsides off, but can’t please everyone- there are strict procedures for order of payments to staff and creditors etc
Easy targets and sloppy reporting
92
9
This is glaringly obvious fraud/theft on a huge scale… surely the NCA / SFO are doing something?
The whole thing is bizarre.
69
12
How much did the titty-bar outing cost? That now appears to have been paid for by the client account. Including all those business class flights for the not so great and good to come into London for the piss up/piss take.
Also how much did the former CEO ("Aye") and the former Managing Partner get paid for delivering the Ince Group PLC to this [redacted]
64
9
If contractors aren't paid that should be reported on, Fred - they're often the people who get most screwed over and forgotten about in these situations, exactly for the reasons you set out. Don't think anyone is attacking partners who are working to sort things out.
117
10
Worth mentioning Axiom have also failed to pay staff pension contributions for the past 2-3 months, whilst still deducting this from salary payments! So even though we have new employers we're chasing thousands of pounds of our own money.
Aside from that, the question remains where did all this money come from? How many clients did this £64m belong to, and why have they not all been clamouring for it back? Unless the source of those client funds wasn't legit in the first place of course...
35
8
I didn’t know that the collective noun for bungalows was a’distraction’ but I love it!
50
11
How?
surely lots of people must have known?
how have they been allowed to purchase a business with client money?
did the SRA hide under their desks?
42
9
@not the waitress from the cora restaurant
are you talking about the golden hello welcome bonus they each received from Prags on completing the ince deal? An interesting concept on a pre-pack detail.
60
7
Bet nobody at the SRA gets sacked as a result of this.
8
1
How can he be so "cool" in saying he's spent it all?
The bastard has ruined lives, stolen from clients and still bold as brass. A fair set of kahonas on the little man!
For us left behind its a very stresfull time.
45
10
The SRA are out of their depth...but in the words of a great rap artists....
Woop-woop, that's the sound of da police
Woop-woop, that's the sound of da beast
Woop-woop, that's the sound of da police
Woop-woop, that's the sound of da beast (yes indeed)
Woop-woop, that's the sound of da police
Woop-woop, that's the sound of da beast
Woop-woop, that's the sound of da police
Woop-woop, that's the sound of da beast (yes indeed)
As "What a mess" posted above - why is he not in custody.
82
8
There are lots of gazette stories about minor infringements relating to client accounts which lead to huge sanctions - but here the SRA sanctioned a deal where the monies used appeared to be funds coming out of client account. It’s extraordinary incompetence
57
5
So when is the LSB opening an investigation into the SRA over this utter shitshow?
82
7
Three obvious questions:
1. Why aren’t the Police involved?
2. Does the firm even have a COFA?
3. On what basis were the firm holding onto more than £64m in client account over more than 8 years? They’re not a bank.
59
8
@It’s a mystery 15 September 23 12:14
I can't answer your questions 1 and 3 but in answer to your question 2 the COFA, and the HOLP, was one Mr Pragnesh Modhwadia
164
28
Yo
(Open up, man) What do you want, man?
(The SRA just caught me) You let them catch you?
(I don't know how I let this happen) With who?
(Pragnesh, you know) Man
(I don't know what to do) Say it wasn't you
(Alright)
SRA came in and they caught me red-handed
Thievin’ with the Modhwadia
Picture this, we were both half-baked
Crying on the accounts room floor
How could I forget that final
Feeling of being free
All this time they were standing there
Client account was completely empty
How you can give access to SRA Guerrillas?
An investigation while you cling to your pillow
You better watch your back there be a whistleblower
Let's review the situation that you caught up in a
To be a true player you have to know how to play
If they say you put the firm in disarray
Never admit to a word when they say
And if they claim, ah, you tell them, "SRA, no way"
Caught nickin’ from client account (It wasn't me)
Saw me thievin' with the COFA (It wasn't me)
Pragnesh had all the power (It wasn't me)
Booze and girls for ‘Casanova’ (It wasn't me)
64 mil… he’s the holder (It wasn't me)
Trust the words of this banker (It wasn't me)
I’m not *really* a w@nker (It wasn't me)
We played and now it’s all over
109
10
I’m sorry if this sounds overly harsh, and I don’t mean to prejudice any future investigation or tribunal, but I think this guy may be sailing a bit close to the wind when it comes to breaching SRA Principle 5: Act with integrity. There, I said it.
50
7
I think we can probably guess who the cofa and colp was …
33
11
In order:
- Mr M and his gang of merry [redacted].
- Those working in compliance roles at the firm.
- Anyone connected with the purchase of the assets detailed in ROF article.
- External compliance providers to the firm (seem to have gone under the radar)
- The firms SRA accounts auditors ( again sailing under the radar so far)
- The firms/partners who thought it was a good idea to sell their businesses to Mr M/the professionals who advised them to sell their businesses to Mr M (accountants, Solicitors, administrators)
- SRA (I know unpopular to be so low on the list), as I understand, it is not their role to approve the sale and purchase of law firms. In comparison to the above at least they seem to have identified the fraud and taken action. Contact at firm tells me the fraud was identified after purchases of Ince/Plexus had completed.
- Police - Where are they/what are they up to?
7
1
Not only is Praggy boy spending client funds like it’s Monopoly money, Axiom are also taking pension contributions too. Maybe the SRA should take a look into that while they are at it
26
17
I think you mean 'destruction' rather than 'distraction'.
And that's not how you spell Edgware.
Unfortunately, the rest of the story appears to be more accurate than your spelling.
61
9
So solicitors have to behave with integrity, honesty and transparency but their regulator does not? We demand answers.
When did the SRA know or when ought it to have known?
Why did it not block the sales, which it most definitely had the power to do?
How much are it’s errors going to cost us all?
27
9
Apologies Edgware...
33
4
Here's an article from Wolverhampton's Express and Star from 2021 referring to Prag's 'cut-price' 3 million quid building purchase:
Work to transform Wolverhampton's Beatties department store into homes is expected to begin early next year.
The landmark Beatties store could be turned into apartments
Council bosses approved plans to convert the historic city centre store into more than 300 apartments earlier this year following its sale and closure which marked the end of nearly 150 years of history in the city.
The first phase of the redevelopment will see around 150 new homes created around the multi-storey car park and modern annex areas of the building.
The ground floor facing Victoria Street and Darlington Street will be retained for retail space in a nod to its former Beatties heyday.
SSYS Beatties Ltd bought the famous Victorian building for a cut-price £3 million last year ahead of House of Fraser's move to the nearby Mander Centre.
Pragnesh Modhwadia, of SSYS Beatties Ltd, said the company recognised the building's history was "committed to a sensible development".
41
13
Can anyone who knows anything about asset tracing explain what the position is for people who sold their firms to Modhwadia?
Presumably the purchase price was paid with stolen money, so are the big paydays they got for selling their businesses in the firing line for some form of asset recovery?
38
15
Anonymous 15 September 23 10:50
Bet nobody at the SRA gets sacked as a result of this.
------------------------
That's a deeply prejudiced and bitter view.
Heads may not roll, but I'm sure that many will be shaken sadly, hands wrung and, I'm almost 100% sure, "lessons will be learned".
I think that I speak for all of us when I say that we couldn't reasonably ask our regulator to do any more than that, poor loves.
27
32
bored of this whole thing now
47
12
Someone needs to step in and help the SRA and to takeover further investigation. They are completely out of their depth and level of competence and understanding. The whole profession and its regulation and systems of control has been not only brought into disrepute, but is now being ridiculed through a fraud and dishonesty that is so blatant to be beyond shocking and where the SRA appear to have sanctioned steps that have been part of the scheme. But the issue is, who can takeover?
44
7
Hello SRA, are you now getting it. The need to use your resources appropriately and be evidenced based in making those decisions? The need to do your job. We can read and we can put a jigsaw puzzle together. This may not be the first but could potentially be the biggest so far of the bomb blowing up in your face. Other bombs have been disposed of without going off- at least not in your face. Imagine those in the know getting together to chart those individual bombs. So far you have kept a lid on it but for how much longer?
28
9
@stilldisapointed it’s the same for ex staff at all the metamorph subsidiaries. Very sad
30
9
Anon 14.18
I believe that the former partners are at risk of claims from the holders of client balances in their firms at the time of transfer. They held that money on trust and passed it to the new firm. Their indemnity is presumably worthless so they may be vulnerable, especially if those funds then ultimately passed back to them as part of the purchase price.
62
16
People are really suffering who have been left without jobs, without wages and (at best) stuck in jobs with this ridiculous story line tarnishing their CV. Whilst I understand this is the most 'action' boring corporate lives can hope to read whilst pretending to look busy until 9pm on a Friday, perhaps spare a thought before posting your 2 cents about 'titty bars' and 'business class flights'. The people who you are actually cheapening with these remarks, most of whom are innocent in all of this, have had their lives turned upside down. As far as I am aware, not one flight was business class and nobody I know went to any 'titty bar'. It is obvious and apparent from the comments where the blame lies. If you don't have anything constructive to add to the conversation, why not go to a 'titty bar' instead seeing as it seems to excite you so much...
32
9
Tail wagging the Dog = Capsticks Partner now Interim LD of SRA
Client independence anyone?
37
8
What the heck was Jonathan Metliss doing whilst this was going on?
Knowing Pragnesh this doesn't surprise me one bit.
But whose money was it? There's something odd going on here.
39
8
I’m prepared to step in and help the SRA to find it’s own arse with both hands.
33
10
@Fred 15 September 23 10:23
Since when did a director with a fiduciary duty get a "get out of jail free card" for letting unchecked fraud happen under their nose? Sorting it out is the very very least they can do.
31
7
Can I also add to the calls for some words from the chairman? This isn’t good enough, Jonathan. You had an illustrious city career (I knew you and looked up to you in the mid eighties at SJB) and you surely have to say something now. Did nothing strike you as odd about these guys? Did you make a conscious (and as it turns out, very wise) decision not be a director ? If you made that decision, why? If you weren’t offered a directorship, did you not ask yourself why not?
36
9
How did Prags expect taking £64 million to end? That no one would notice? Tying the money up in property makes no sense if he was going to leg it.
44
9
@Be Reasonable
The SRA had been investigating him since 2018 for financial irregularites, therefore, why did they rubber stamp his acquisition of three more entities.
IT IS NOT a deeply prejudiced and bitter view, it is who is going to be held accountable at the SRA for allowing this massive fk up to take place.
They slipped and slid all over the poo bag.
35
7
Some people might be working hard to sort out the mess but they should hang their heads in shame at the way they think contractors are the ones that should be shafted. Contractors that worked hard and were not told that they were no longer needed and were encouraged to carry on working knowing full well they had no intention of paying them. Long term staff members albeit contractors. No sorry the partners and directors have made that decision not to pay and some contractors got paid some of the weeks others not. Discrimination at its worst. Nor have they given time to those awaiting payment - totally ignored. Disgusting
21
11
@Bored with the conversation 15 September 23 15:41
he’s prebooked the ‘tittybars’ for next 500 yrs - with that £64m of clients money - so can’t go !
26
11
Some people might be working hard to sort out the mess but they should hang their heads in shame at the way they think contractors are the ones that should be shafted. Contractors that worked hard and were not told that they were no longer needed and were encouraged to carry on working knowing full well they had no intention of paying them. Long term staff members albeit contractors. No sorry the partners and directors have made that decision not to pay and some contractors got paid some of the weeks others not. Discrimination at its worst. Nor have they given time to those awaiting payment - totally ignored. Disgusting
22
17
I duinno. These things happen. Sometimes you just have to pick yourself up, dust yourself down and start all over again.
I've had to change my name a couple of times but as long as I keep my photos out of social media and the papers and don't go on tv I'm okay.
I'm sure he'll be fine.
12
0
Not only is Praggy Boy stealing client money, Axiom is stealing people’s pensions contributions too.
Maybe the SRA could look into that while they are at it…
18
11
usually how is the chance for the clients can get back their money from the clients accounts...? says from similar previous fraud cases of solicitor stolen client money....
10
0
SRA - when did you first hear that Prags was bent?
FOI request
9
0
@honestly
it’s called ‘sarcasm’, dude.
One of the founding pillars of RollOnFriday.
I was agreeing with you.
10
2
@ Big Jim 15 September 23 17:10 - this is what makes no sense at all. The only possible explanation I can think of is he "was borrowing the money" and would put it back as the property ventures came to fruition. Of course, I am sure I am being naive!
10
1
All of those properties or majority of them were over valued by Prags best mate ! All going down ! Oh also maybe the mortgage broker who lent on them too.
11
1
The place seems to be where most law firm are defunct
14
1
Go big or go home I guess.
13
0
At least there are more parking spaces at the office now.
7
0
Big Jim- Well certainly the SRA seemed to have take a while to notice.
9
0
@ Tony Greeklong - Freebie and the Bean 15 September 23 19:17
Stay away from any major events covered by the media. Those aerial shots panning over the crowd can ruin everything.
11
0
Why didn’t any fee earner / partner notice money missing from client ledgers ?? Or was it ‘masked’ by modhwadia ? In which case others including his entire accounts team must’ve conspired ?
12
1
The biggest shock is that he purchased property in Luton and Wolverhampton.
8
1
I am incensed by the fecklessness of the SRA and its refusal to be transparent about what it knew when Ince and Plexus were sold.
It is simply unacceptable for it to refuse to answer questions about this.
Paul Philip, (CEO) I call for you to answer the questions or resign.
Your silence is utterly unacceptable. It is cowardly and it is unbefitting.
8
0
No doubt this is survivable but if this was repeated on a similar scale a few times within a couple of years then legal practice and its regulation as we know it at present will be finished. I'm so glad that I'm about to retire. I notice that, whilst the Gazette is giving a good factual account of this story, it daren't allow comments.
8
0
how the fck can only prags be in on this? greed has got to him. and he will get punished hard for this. however, there must be many people around him that have paved a way for him to carry this out. why is no one looking at the cto? rupesh? other partners and accounts team? surely back handers were made for prags to be able to carry out this crazy fraud
9
0
How to do a scam.
1. Get a fake ID of someone the same age who has died (The Day of the Jackal)
2. Open a bank account in the false name. (The Shawshank Redemption)
3. Put 40 Million cash into the account.
4. Invest 25 Million into properties as a red herring (The Sting)
5. Claim all of the money has gone (Boris Becker)
6. Do 6 years for fraud and be out in 4 for good behaviour. (Monopoly - Go to jail, move directly to jail, do not pass GO, but DO collect 40 Million when you get out)
7. Move to Brazil, or anywhere where you cannot be extradited
8. Once you have been convicted for a crime, you cannot be convicted again for the same crime (Double Jeopardy)
9. So the 40 Million is good to go, and well worth the 4 years inside.
Would you go to jail for 10 Million a year, of course you would and why not. Most people go to jail for free. Idiots.
10
0
"When you steal 600 dollars, you can just disappear. When you steal 600 million, they will find you, unless they think you're already dead"
- Hans Gruber, Die Hard
12
0
Lost in all of this are the auditors who supposedly conducted the SAR audits. Are they going to be held accountable as well? What about the CFO and the rest of the Finance team?
9
1
Given that the Interpath initial Administrator’s report filed at Companies House states that there were 2 offers for Plexus, whose decision was it to accept Axiom’s as opposed to the alternative and clearly better offer??
Either Interpath’s or Origin’s decision (or a joint discussion) - but either way the lack of due diligence was incompetence in the extreme leading to the loss of many jobs and heart ache for good loyal staff.
8
2
I think people are being harsh on the SRA. After all, they have their hands full disbarring NQs who were pressured into making stupid mistakes. Its a bit unfair to expect them also investigate a £multi-million fraud that's already been confessed to.
24
8
This is why SRA needed to ask for more money and greater sentencing powers without going to SDT.
Just like a recent PM: say what you like about the SRA, but they always get the big calls right. For example, spending 000's investigating trainees and crafty individual solicitors (who convicted of a crime and sent to prison) might try and keep on practising. Those cases don't solve themselves you know.
I think we can all agree, we should simply allow 80% of our take home pay should be transferred directly to the SRA - so they can get on with the business of keeping our image intact with the gen public - who's is with me?
23
6
At least the SRA have sufficient time to consider taking on the role of CILEX Regulator - perhaps they should get their own house in order first, before looking to badly run another one.
27
7
‘Very much business as usual,’ Samantha Palmer replied when asked about Ince & Co’s future following its acquisition by Axiom. Palmer, a finance and projects partner at Pinsent Masons, is the appointed solicitor manager for Ince’s administration and is overseeing all regulatory aspects of the acquisition.
I love it when it comes back to haunt them.
Did anybody ask to see evidence of the source of funds?
19
5
Glad others have raised the correct spelling of Edgware. That bugged me more than it should!
It is unfortunately not the first time Edgware has appeared in RoF article (with the same incorrect spelling naturally).
https://www.rollonfriday.com/news-content/exclusive-firm-collapses-blaming-covid-19
I feel this just sums Edgware up.
22
4
Asking for a friend.
12
0
Do you think there is any chance that the golden hello payments may have been the proceeds of crime?
Asking for a friend.
22
6
Where's Metliss?
31
8
Poor Wiseman Lee. A brilliant local firm fed to the lions.
23
7
When I tot up what he’s bought and what I anticipate he’s spent, there still seems to be an awful lot missing.