Overview
Internal filings and corporate accounts reviewed in relation to Market Financial Solutions Ltd. (MFS) show Morgan Stanley was an early institutional backer of Paresh Raja’s business network. The U.S. bank purchased £50 million of "Class A loan notes" from an entity called Earthave Bridging in November 2021, according to a loan document filed at UK Companies House. Earthave, controlled by Raja, used the proceeds to acquire MFS mortgages and later repaid investors, its 2021 and 2024 accounts show.
How the Morgan Stanley link emerged
The November 2021 transaction represents the first publicly documented connection between Raja, his group of companies and a Wall Street institution. Filings indicate Morgan Stanley subsequently received repayment on that loan with interest. The bank declined to comment on the matter.
That early backing came as private credit drew a broad array of institutional capital worldwide - from insurers to smaller pension funds - contributing to rapid growth in the sector. The documents place Morgan Stanley in Raja’s complex arrangement of companies before larger global banks later routed significant sums into the group.
Expansion of bank exposure
After Morgan Stanley’s purchase, several major banks were reported to have entered the network of deals that helped fuel MFS’s mortgage and bridging loan business. Names later connected to financings linked to Raja and MFS include HSBC, Barclays and Wells Fargo. Insolvency filings show that in 2025 Raja-controlled companies raised hundreds of millions of pounds for MFS from global banks, and that Wells Fargo invested £142 million in October last year according to those filings. Wells Fargo declined to comment.
Despite Morgan Stanley’s repayment, other lenders that provided capital subsequently recorded heavy losses tied to the group, according to the records and insolvency papers.
Collapse, allegations and legal developments
MFS collapsed in February, leaving creditors with claims totaling £1.8 billion, administrators AlixPartners reported. Court filings reviewed in the same documents say some creditors have accused Paresh Raja of misappropriating company funds. In a March court judgment, the judge said Raja had apparently fled to Dubai. AlixPartners declined to comment and a representative for Raja, Salamander Davoudi of Tancredi Intelligent Communication, also declined to comment.
Britain’s chief insolvency judge described the situation in a late February ruling as presenting "serious and unresolved questions regarding the management and governance" of MFS, and noted that multiple large financial institutions had become creditors.
Regulatory activity
The fallout has prompted official scrutiny. Britain’s Financial Conduct Authority opened an investigation into MFS in March. In addition, the Financial Reporting Council announced on June 11 that it would investigate a group of auditors involved with MFS and related companies. The FRC declined to comment and the FCA did not immediately respond to requests for comment.
What the records show - and what they do not
Corporate filings reviewed show a pattern of Rajacontrolled entities channeling funds into MFS from at least 2015, based on a review of filings from 78 companies under his control. The documents make clear that Morgan Stanley’s November 2021 purchase of £50 million of Class A notes from Earthave Bridging funneled cash that Earthave used to buy MFS mortgages, and that Earthave later repaid investors as set out in its 2021 and 2024 accounts.
But the records also leave open key questions. While some lenders have been repaid on specific transactions, insolvency filings and court judgments record creditor losses on a wider scale and set out allegations against company executives. The filings and rulings are the basis for ongoing investigations and legal processes.
Implications
The case highlights how mainstream banks became connected to the expanding private credit market - a sector that reportedly reached roughly $3.1 trillion in size before a series of defaults and corporate failures prompted capital withdrawals by some investors. Regulators and market participants are now examining the governance and due diligence surrounding those exposures, particularly where lending was routed via complex company structures.
Exchange rate used in records: $1 = 0.7557 pounds.