A fortnight ago, the Serious Fraud Office (SFO) arrested seven individuals in dawn raids in connection with £66m of client funds missing from Axiom Ince’s accounts. Although his home was searched during the SFO raids, Modhwadia was not arrested.
The investigation was launched after the former Axiom Ince chief admitted in a submission to the High Court in September that most of the missing funds had already been spent.
In an affidavit, he confirmed that client monies were used to acquire Ince and another firm, Plexus Law, earlier this year. Funds were also spent purchasing six properties and redeveloping seven others, he told the High Court in September.
Modhwadia, 40, is the director of 20 companies, according to official records. Fourteen are linked to property, according to Companies House. Of all the companies he is a director of, seven are in receivership, one is insolvent and Axiom Ince is now in administration.
Lawyers and clients of Axiom Ince have been caught in the fallout of its dramatic downfall. The Telegraph spoke to former insiders about how the company unravelled so quickly.
Just months before the SRA’s intervention, Axiom DWFM, as it was then known, had bought Ince in a £2.2m pre-pack administration deal, saving hundreds of jobs.
The deal was a surprising one. Ince, which had been bought by Gordon Dadds in 2019, has a near 160-year history and was once among the largest law firms listed in London.
Axiom, by contrast, was set up by Modhwadia only in 2015.
Ince could not afford to be picky about its rescuer. It was toppled by a cash-crunch and years of accounting issues. Shares were suspended at the start of the year after a delay publishing accounts, before the firm ultimately collapsed in April.
However, many staff at Ince were initially sceptical about Axiom’s takeover.
Ince was a 700-person international firm known for its shipping, aviation and insurance expertise. Axiom was a high-street outfit specialising in private client and property work. The takeover quadrupled Axiom’s revenue from £25m to about £100m.
Ince’s lawyers charged far more per hour for their specialist advice than Axiom’s did. However, Axiom staff later enjoyed lording over Ince employees after the rescue deal.
There were clear cultural differences between the two firms. Ince partners were reluctant to adopt Axiom’s lion head logo, which some argued was too masculine.
Hiring out London Reign nightclub twice to celebrate the acquisition was also criticised as being inappropriate and something straight out of the 80s.
Modhwadia was celebrating his 40th birthday in Las Vegas while negotiations were held, meaning many Ince employees only met him after the takeover.
