The firm’s imminent collapse had been an open secret for weeks prior to the closure
The Solicitors Regulation Authority closed down law firm Axiom Ince with immediate effect following its intervention. The firm operated 14 branches in England and Wales and employed over 1400 people. The move involves all of its offices and makes all staff redundant.
The closure follows much speculation over the firm’s ability to operate as its insurance cover had expired. The SRA had suspended the individual practices of directors Pragnesh Modhwadia, Idnan Liaqat and Shyam Mistry in August. In a statement, the SRA said the action had been necessary to protect the interests of clients and former clients of the firm.
In a statement, the SRA said, “An intervention means we have closed a firm with immediate effect. We will stop the firm from operating, take possession of all documents and papers held by the firm, and take possession of all money held by the firm (including clients’ money). We are not responsible towards employees or trade creditors of firms that we have intervened in.”
Approximately £66 million in client money was found to be missing from the firm’s accounts and spent. The SRA referred the case to law enforcement agencies but due to the complexity of the alleged fraud, the Metropolitan Police referred the case to the Serious Fraud Office (SFO). The two organisations say they will work closely together on the investigation.
The SFO has already carried out searches across nine sites and arrested seven people in connection with its investigation of the firm. The criminal investigation into the collapsed law firm involves the missing client money and how funds passed from the firm’s client accounts with Barclays to the State Bank of India to fund purchases.
Axiom Ince was founded in May, when law firm Axiom DWFM purchased corporate and commercial law firm Ince Group, as it was set to enter administration. Two months later Axiom Ince then also bought struggling insurance law firm Plexus LLP.
Axiom Ince went on to file a claim for alleged breach of fiduciary duty against Modhwadia. A High Court judge then imposed a freezing order of £64m against Modhwadia, after he admitted client money had been used to buy both Ince and Plexus and several properties. Modhwadia was unable to account for the money.
Axiom Ince’s imminent collapse has been an open secret for several weeks and most lawyers at the firm have been able to find new homes for their practices. But hundreds of business services staff across Axiom, Ince and Plexus have been left in the lurch as lawyers jump ship, taking clients and ongoing matters with them.