The London Reign nightclub in Piccadilly describes itself as the city’s “first showclub”, where revellers mix with fire breathers and female performers who are dressed in little more than swimwear.
A recent picture posted on Instagram shows what appears to be fake dollars raining down on clubbers as they hold up bottles of fizzy wine with sparklers on their necks.
It was at the London Reign where Pragnesh Modhwadia, the City lawyer, chose to host a party in July to celebrate the merger of his law firm, Axiom, with Ince Gordon Dadds, a maritime law specialist the company had just rescued out of administration.
Partners were flown in from offices around the world to mark the occasion, with some coming from as far afield as Hong Kong. The nightclub celebration followed earlier welcome drinks at the Kensington Palace Pavilion, in the shadow of the Prince and Princess of Wales’s official residence.
Videos of the gathering at London Reign show the name Axiom Ince displayed on TV screens around the venue. The theme song from The Godfather can be heard as a huge Union flag is waved across the dance floor.
The event was similar to a previous Axiom party where Modhwadia can be seen drinking Dom Perignon champagne straight from the bottle and dancing to 2Pac’s ‘California Love’, in videos first reported by the legal website RollonFriday.
The celebrations proved to be short lived.
The Solicitors Regulation Authority (SRA) suspended Modhwadia and two other directors at Axiom Ince in August. In Modhwadia’s case, it cited “suspect dishonesty”.
Axiom Ince subsequently obtained a freezing order against Modhwadia, eventually extended to cover £64m of assets, after discovering money missing from client accounts.
Weeks later, the SRA shut down Axiom Ince and administrators were called in.
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.
Described as well dressed, bubbly and confident, Modhwadia has been compared to a politician: someone who made plenty of promises and approachable when problems needed fixing.
This helped instill confidence in many Ince employees as they grew excited about his ambitious proposals to rebuild the business. At a three-course management dinner in Mayfair following the acquisition, Modhwadia shared hopes of becoming a law firm with £250m of revenue within the year.
However, it was unclear how he planned to reach that goal.
“There wasn’t [a strategy] at all really. It just seemed to be: have fun and don’t ask if there’s a strategy,” says one former employee.
Employees were later bewildered by Modhwadia’s decision to rescue another collapsed firm in a £1.1m pre-pack deal in July, only months after buying Ince.
His pitch was that Plexus Legal, a Leeds-based insurance specialist, could boost efforts to revive Ince’s reputation as the top adviser to the world’s shipping giants.
Yet Ince staff had only just joined Axiom and there were fears that the company was over-extending itself.
Weeks later, the SRA took action against Modhwadia and two other directors, Shyam Mistry and Idnan Liaqat.
After the SFO launched its investigation, the SRA said it suspected Modhwadia, Axiom Ince’s sole shareholder, of “misusing significant amounts of client money” in what appeared to be a “sophisticated” fraud that “included falsified bank statements and letters.”
It said: “We visited the firm last year to investigate a self-report by the firm about another solicitor in relation to immigration work, but neither this complaint – or any others – were linked to the issues we uncovered with the client account or the suspected dishonesty that led to the intervention.”
In short order, the company began to unravel. Ince’s former chief executive Donald Brown and managing partner Jennette Newman left. Partners followed suit, with whole teams poached by rivals capitalising on the opportunity.
Those who were left complained of being in the dark about what was going on.
As the weeks passed, competition intensified between employees as they flooded the job market. It fuelled feelings of desperation, difficult to disguise during job interviews.
While most lawyers eventually found new jobs, support staff were abandoned. Many are still jobless.
The Axiom Ince intervention is the biggest ever by the SRA, led by Paul Philip, the chief executive. The regulator has warned that the entire legal profession may have to pay a fee to help make whole Axiom Ince clients who have lost money.
As the SFO’s investigation continues, former employees wonder whether the SRA should have intervened earlier.
The regulator has defended its approach, noting that the suspected fraud was so well hidden that it remained undetected by the firm’s partners, accountants, banks and auditors.
Meanwhile, the last employees heard from Modhwadia was a statement his lawyer provided following the SFO dawn raids. It said: “I would like to emphasise that Mr Modhwadia’s focus throughout this matter has been towards his employees and clients.”
A lawyer acting for Modhwadia told The Telegraph: “It would not be appropriate for our client to comment at this time given the ongoing investigations.”
The SRA declined to comment.
The SFO was contacted for comment.
When it announced its investigation, director Nick Ephgrave said: “There are a number of significant questions that need to be answered: clients from this law firm are missing many millions of pounds and more than 1,400 of its staff have lost their jobs. The impact on those affected is extremely serious.”