The Solicitors Regulation Authority has been formally recognised as a creditor in the bankruptcy of former Axiom Ince boss Pragnesh Modhwadia’s bankruptcy – opening the way for the regulator to recovering the £5m it has spent intervening into the firm. Following a hearing today, Master Clark granted the regulator’s application for unsecured creditor status.
In written submissions, the SRA said it sought an order that Modhwadia ‘as a former manager of the firm pays 100% of the costs of the intervention into Axiom’s practice’ and the costs ‘of these proceedings’ as the intervention was ‘necessary…because of the conduct...’ of Modhwadia.
The court heard the costs of the intervention had so far reached £5m, and are still rising. Tetyana Nesterchuk, for the SRA, said: ‘I am sure you are aware this is the largest intervention by the SRA to date and is still ongoing.’
In separate, criminal, proceedings, Modhwadia has denied fraud by abuse of position, conspiracy to use a false instrument and conspiracy to conceal, destroy or otherwise dispose of documents which he knew or suspected were or would be relevant to an investigation. A trial is listed for February 2027.
Modhwadia did not attend today's remote hearing and was not represented. As an unsecured creditor, the SRA will have no security over Modhwadia’s property but may receive a share of proceeds.
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Nesterchuk said the reason for the SRA’s intervention into Axiom Ince was the ‘eyewatering sums disappearing from client accounts, being put into office accounts and then flowing out’.
Granting the order, the judge reduced the costs of the proceedings sought by the regulator after a hearing was adjourned to enable the SRA to notify the bankruptcy trustees. Master Clark deducted £5,000 as the ‘cost of that hearing was wasted’.
A bankruptcy order was made against Modhwadia in May 2024. He was suspended by the SRA in August 2023 on suspicion of dishonesty and Axiom Ince was closed on 3 October 2023.
