NatWest's link to Twinwin draws US and Canadian regulator attention
Regulators in the United States and Canada are watching a new development involving NatWest's provision of banking services to Twinwin, a firm alleged to have been used by the founder of collapsed lender MFS to siphon investor funds.
NatWest provided banking services to a company allegedly used by the founder of collapsed property lender MFS to divert investors' cash and "siphon off" funds, City AM can reveal.
The bank held the day‑to‑day account for Twinwin, a company that was allegedly used by Paresh Raja, founder of Market Financial Solutions (MFS), to generate fees from clients' cash without their knowledge, according to people familiar with the matter.
In a legal filing earlier this year, officials claimed the company was used by Raja to "siphon off" money from investors and "perpetrate fraudulent wrongdoing", according to reports.
An insolvency court Judge said in March that Twinwin's relationship with MFS appeared "clearly to amount to a diversion of funds" between MFS lenders and property owners.
NatWest's ties to Twinwin, which have not been previously reported, could drag the bank into the ongoing Financial Conduct Authority (FCA) investigation into MFS.
One source close to the matter said they would be "amazed" if the City watchdog's probe did not also look at NatWest for running Twinwin's accounts.
According to an insolvency ruling earlier this year, Twinwin was used to re‑route cash from MFS vehicles, which were backed by institutional investors. Twinwin would allegedly re‑lend funds to borrowers at marked‑up interest rates with added intermediary fees.
When the loans were repaid, the money was allegedly returned straight to Twinwin's account and never paid to the original investors.
A spokesperson for Raja said he "does not recognise" the characterisation of Twinwin and "robustly denies all allegations of wrongdoing".
MFS collapsed into administration in February, owing its lenders over £1bn. Its downfall has rippled through the global banking sector and implicated some of the world's biggest financial institutions.
NatWest said: "We are aware of allegations reported regarding this group of entities but cannot comment on individual customers." The bank added it has "robust economic controls and procedures" and works closely with relevant authorities as appropriate.
NatWest and Barclays among lenders with ties to the MFS ecosystem. Banks providing operational accounts to shadow lenders are subject to FCA systems and controls rules, alongside Money Laundering Regulations, which require them to conduct ongoing due diligence, monitor accounts for suspicious activity, and prevent their services from being used for illicit operations. NatWest has no direct credit exposure to MFS or its related entities.
Twinwin was placed into provisional liquidation shortly on 6 March, an emergency, interim measure that gives the liquidators powers to step in, freeze funds and take control of bank accounts, with a Judge's permission. FRP were appointed official liquidators on 18 June.
A source close to FRP said the insolvency firm has been in communication with the FCA regarding Twinwin's liquidation.
Twinwin's last filed accounts listed it as having just two employees, despite being used to channel tens of millions of pounds in loan transactions and hold multi‑million pound property portfolios.
The FCA opened an investigation into MFS in March. The Mayfair‑based firm was accused of "double pledging", where it used the same property assets as collateral for multiple loans from different institutions at the same time.
The financial institutions facing scrutiny as part of the investigation include Barclays, Jefferies and Santander as well as private credit lenders such as Elliott Management, Castlelake and Apollo's Atlas SP Unit.
Barclays provided banking services for MFS Ltd, which served as the lender's central operating entity, distinct from its network of separate funding silos.
City AM previously revealed Barclays was holding in excess of £160m belonging to the MFS operating unit and silos at the time of its administration in February.
Reporting for CityAM Canada on business and the wider Canadian economy.
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