UAE bank FAB at risk over MFS-linked London property bust

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UAE bank FAB at risk of insolvency over MFS-linked London property bust

Editorial Team

May 29, 2026

UAE bank FAB at risk of insolvency over MFS-linked London property bust — Photo: Dubaidiplomacy.com

UAE’s FAB Caught in London Property Web After Shadow Bank Collapse

DUBAI,— First Abu Dhabi Bank’s Swiss unit extended mortgages against 60 London properties owned by companies tied to individuals linked to the collapsed British shadow lender Market Financial Solutions (MSF), the Financial Times reported, raising fresh questions about the bank’s exposure to a widening insolvency scandal.

The 60 property companies are registered to accountant Khemanand Hurhangee. All 60 filed notices of intention to appoint administrators at London’s High Court, according to the Financial Times.

The move could create complications for UAE’s biggest bank FAB, which lent against those assets through its Swiss arm.

Data from CREFi, a commercial real estate finance intelligence firm, showed FAB financed the 60 properties during the past year.

The properties were originally purchased using mortgages from lending vehicles controlled by Paresh Raja, founder of Market Financial Solutions, or MFS.

MFS collapsed into administration earlier in 2026. Administrators handling the insolvency have filed a lawsuit against Raja, alleging he misappropriated £1.3 billion British pound to fund a lavish personal lifestyle.

The administrators claim Raja used the company to carry out wide-scale fraud and that he and his wife received more than £408 million in payments to personal bank accounts held in Britain, Monaco, the United Arab Emirates and Singapore.

In the lawsuit, administrators allege that Hurhangee and four other individuals listed as shareholders behind a £950 million property portfolio financed by MFS held their stakes on Raja’s behalf.

The administrators say it is not plausible that Hurhangee and the others are the true beneficial owners.

They point to his role at a small accountancy firm, Magus Chartered Accountants, and what they describe as a lack of any independent source of wealth consistent with ownership of such a large portfolio. Magus helped MFS prepare its financial statements.

FAB and Raja both declined to comment, the Financial Times said. Magus did not respond to a request for comment.

Dozens of other property companies linked to individuals connected to MFS have already fallen into administration, contributing to a rise in the officially recorded insolvency rate across England and Wales.

Creditors to MFS no longer hold a direct claim on the 60 companies now moving toward administration, even though many of the underlying properties previously carried MFS-linked loans.

FAB first provided loans to 32 of the property companies in July 2025. It then extended mortgages to the remaining 28 in early February 2026, only weeks before creditors appointed administrators to MFS citing what they described as serious irregularities in its financial affairs.

At the time FAB made that second batch of loans, MFS bank accounts held at Barclays had already been frozen for several months following concerns raised by the British lender.

CREFi data showed FAB directly refinanced MFS loans on 26 of the companies. The remaining properties had either been refinanced earlier by other lenders or carried no outstanding mortgages registered at Companies House.

The FAB financing is understood to have taken over from loans that DBS Bank, the Singapore-based lender, had previously held against the same properties.

DBS pushed back on any suggestion it was aware trouble was coming at MFS before the shadow lender went under.

A bank representative said DBS was unable to discuss individual clients or cases but maintained that everything it did was in line with its internal controls and risk management practices, and that it had no prior knowledge of any forthcoming insolvency action.

Raja, who lives in Dubai and is subject to a worldwide travel ban and asset freeze, denies any wrongdoing. His spokesman said Raja has always maintained that the allegations of fraud and dishonesty are without foundation.

Lawyers for Raja have said the property companies involved were “not sham companies” but “part of a larger group which are beneficially held for MFS and its associated lenders.”

Insolvency practitioners acting for MFS creditors are working with estate agent Knight Frank to sell the properties, which include prime real estate in the London neighborhoods of Chelsea and Mayfair.

FAB holds more than $400 billion in assets and is majority owned by the sovereign wealth fund Mubadala and members of Abu Dhabi’s ruling family. It opened a new London branch in Mayfair last year.

(With files from FT, The Telegraph UK, tradersunion.com)