Former law firm boss admits using client money to fund takeovers
The former boss of the acquisitive legal group Axiom Ince has admitted to using client money to fund the purchase of Plexus Law and Ince earlier this year.
Managing partner Pragnesh Modhwadia confirmed in an affidavit that £64m taken from client accounts had mostly been spent. It had also been used to buy six properties and fund construction work on another seven.
Modhwadia is being investigated by the Solicitors Regulation Authority for “dishonesty”, although the regulator has not intervened in the wider firm.
The High Court has now extended a freezing order against Modhwadia to £64m while Axiom Ince prepares to issue a claim against its former leader, according to reports in the Law Society Gazette.
It also put an injunction in place to prevent the sale of the properties, which are owned by companies controlled by Modhwadia and his family.
Defendant law firm Plexus had seven offices in the group – Chelmsford, Edinburgh, Evesham, Leeds, London, Liverpool and Manchester – split across its English company Plexus Legal LLP and its Scottish division Plexus North LLP.
It was the second rescue deal by Axiom in just six weeks, after it bailed out shipping law specialists Ince in another pre-pack deal in late May.
London-headquartered Axiom DWFM was formed from the 2021 merger between Axiom Stone and DWFM Beckman with bases in Birmingham, Bristol, Swindon and Edgware. It had 19 partners and fewer than 150 staff, but the Plexus deal increased its workforce to around 1,000 people for the firm now known as Axiom Ince.