The Metropolitan Police has launched a fraud investigation into the collapse of luxury jeweller Vashi, three years after the retailer fell into liquidation with debts of £170m.

The force’s complex fraud team has opened Operation Palisade, which is understood to be examining suspected economic crimes linked to the failure of Diamond Manufacturers Ltd, the company behind Vashi, The Times reported.

The luxury jewellery business, founded by Vashi Dominguez, collapsed in April 2023 following a winding-up petition from the landlord of its Canary Wharf store.

The retailer had operated stores in London, Manchester and Birmingham, and had attracted high-profile investors including Phones4u founder John Caudwell, Charles Tyrwhitt founder Nick Wheeler and former Pret A Manger boss Clive Schlee.

The Times reported that liquidators later found major discrepancies in the company’s accounts, including £156m of stock declared to investors that was valued at just £100,000. Accounts filed at Companies House also claimed sales of more than £100m in 2021, while internal documents reportedly showed actual sales of £5m.

The Times said the whereabouts of Dominguez remain unknown, although liquidators said in their latest progress report in May that they believed he was in the United Arab Emirates.

The investigation comes after investors had previously voiced frustration over the lack of action from UK authorities, with earlier reports suggesting the Serious Fraud Office and Met Police had not opened probes into the collapse.

The Times also reported that accountant Rajnikant Chhotabhai Patel, who signed off Vashi’s accounts, is facing disciplinary action from the Institute of Chartered Accountants in England and Wales over alleged misconduct.

Patel, formerly a member of the Association of Chartered Certified Accountants, had his auditing certificate removed by the body in November 2024, according to the report.

No allegations have been proven.

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