FRC Investigates Small Auditors’ Role in Market Financial Solutions Collapse

The UK’s Financial Reporting Council (FRC) has launched an inquiry into small accountancy firms involved in auditing the now-insolvent mortgage lender Market Financial Solutions (MFS).

The investigation follows the collapse of MFS and its affiliated entities, owned by founder Paresh Raja, which entered liquidation in February. Creditors, who allege fraud and have reportedly lent over £2bn ($2.6bn) to the group, have intensified scrutiny of asset-backed lending practices.

MFS’s financial oversight was fragmented, with multiple small audit firms handling its accounts rather than a consolidated review by a large firm. The FRC is focusing on Berkeley Finch, which provided an unqualified audit opinion on MFS’ 2024 financial statements, and Silver Levene, which audited Raja’s Zircon Group in 2024. Berkeley Finch received £72,375 for its audit, while MFS owed debts to Barclays and Apollo Global Management.

Silver Levene clarified the investigation does not imply misconduct, pledging full cooperation. The firm was recently acquired by Xeinadin.

Magus Chartered Accountants and two unnamed auditors are also under review for their work on MFS and related entities. Magus contributed to preparing MFS’ financial disclosures.

Raja faces a global asset freeze and denies allegations from administrators, per the Financial Times.

The probe also includes an unnamed third auditor. No other high street firms auditing MFS-linked companies have been named yet.

This report is based on original content published by The Accountant, a GlobalData-owned outlet.

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