Welcome to the suck.
The CEO of Axiom Ince has been suspended along with two other directors of the firm.
The chaos which has engulfed the business has given rise to speculation that the recent sale of Plexus to Axiom Ince may have to be unwound, and that the police are now investigating.
Axiom CEO Pragnesh Modhwadia along with Idnan Liaqat and Shyam Mistry all had their practices shut down by the SRA on Monday.
A day later Donald Brown, the CEO of Ince - which was being run as a separate entity - and its Managing Partner, Jennette Newman, both resigned.
Modhwadia was the CEO and managing partner of Axiom Ince, previously known as Axiom DWFM, and was riding high after supersizing his business with the pre-pack administration purchases of Ince for £2.2m and Plexus for £1.1m.
RollOnFriday revealed how Modhwadia flew in almost the entire complement of Ince employees for a knees-up in Kensington Gardens which ended in a burlesque club he hired especially to toast their arrival.
His downfall was so rapid that Plexus staff never got a chance to benefit from strippers at his expense, and will have to settle for the revelation that their new firm is also a complete and utter clown show instead. Many are understood to be seeking new positions this week.
Mistry was head of personal injury and medical negligence, while Liaqat was head of property. The profiles of all three men have been wiped from Axiom Ince’s website.
The SRA said it had intervened to close their practices as they had failed to comply with accounting rules, and that in Modhwadia’s case “there was reason to suspect dishonesty”.
A spokesperson for the firm gave more detail, namely “the misappropriation by Pragnesh of very significant sums of money”.
Although three of Axiom Ince's 16 directors are no longer allowed to work, it continues to be able to trade. The SRA said that “any investigation work only involves the individual practices of the three solicitors above and not the over-arching firm”.
However, there is now unconfirmed speculation that the sale of Plexus to Axiom Ince may be in jeopardy. "Axiom have told Plexus partners that they are forensically reviewing the accounts and may have to reverse the deal to buy them", said a source, since Axiom "only paid the first instalment to buy Plexus and may no longer be able to afford the rest".
Asked to comment, and asked whether they should have checked out the purchaser of Plexus more diligently, administrator Interpath did not respond, which may have something to do with ROF.
Sources have queried how the regulator could have given approval for the sale to go ahead given what is now emerging about the purchaser.
The SRA said it could neither confirm nor deny that the police were also involved. The Met said they were not investigating, however the Serious Fraud Office said it could neither confirm nor deny that it was investigating.
A spokesperson for Axiom Ince said, “it would be deeply inappropriate for us to comment on unfounded speculation", but disclosed that the firm had retained accountancy practice BDO to conduct "a thorough and comprehensive investigation and review. The aim is to continue to operate normal business practices, as we have done over the last week”. ('Normal' for Axiom Ince Plexus, that is. For any other firm it would be a once-in-a-lifetime, five-alarm fire.)
Another spokesperson told ROF, “The directors and partners have taken immediate steps to protect the business, our clients and our employees whose wellbeing remains our priority as we navigate the best and most viable way to proceed”. Gulp.