There are fewer people extending golden goblets to Prags these days.*
Pragnesh Modhwadia, the former Managing Partner of Axiom Ince, allegedly forged bank letters to conceal from his firm, the SRA and Pinsent Masons that millions of pounds were missing from its client account.
Axiom Ince went into administration after a £65m black hole was discovered and the SRA intervened. It is now suing Modhwadia in the High Court, where it has alleged that he doctored a letter to give the impression that £57m was being held across 200 client accounts at the State Bank of India.
In fact, there was an £18m debit in the account which related to an outstanding loan, claims the firm.
Modhwadia presented his forged handiwork to Axiom Ince when it began probing rumours that money had gone astray.
Pinsent Masons acted for Axiom Ince when the SRA opened an investigation into Modhwadia and he has been accused of attempting to foil it with a forgery as well.
Lawyers from Pinsents arranged to drop in on the Wolverhampton branch of Axiom's bank to quiz staff directly about the client account situation.
News of the impending visit allegedly sent the entrepreneurial founder back to work with his scissors and tip-ex, and after adding a fake signature to a second forged bank letter he raced to Wolverhampton ahead of Pinsents.
On arrival he attempted to persuade staff to present his exculpatory letter to Pinsent Masons in the hope that its lawyers would in turn pass it on to the SRA, claimed Axiom Ince.
The alleged scheme didn’t work, although, as Modhwadia has since admitted that he spent most of the missing £65m buying and renovating his property empire and on the purchases of Ince Gordon Dadds and Plexus, perhaps it did.
In an update the SRA has said that a levy on all solicitors is looking “likely” to plug the gap in its compensation fund created by Modhwadia’s alleged antics.
“Although we have not made any decision about what this means for a collection of funds from the profession, it looks likely that, after years of keeping them stable, we will need to increase levies”, said the SRA. ROF estimates that it could equate to a £500 charge per solicitor.
The SRA has defended its response to the crisis. “The sole shareholder at the firm was suspected of misusing significant amounts of client money, resulting in a shortage on the client account estimated to be more than £60 million”, it said.
Even though the missing money meant it was “not possible for the whole firm to carry on operating”, the SRA initially intervened only in Modhwadia’s practice and those of two other directors in order to protect clients, it said.
Then it “worked with the remaining directors to achieve as orderly closure as possible in the circumstances”, which by most accounts reaching ROF involved absolute chaos as stoic staff ploughed on to the end. For their efforts, the solicitors among them may soon be billed around £500 each.
*Thanks to the source who provided this snap. But come on, where's the helicopter/Vegas footage?