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- BlackRock HPS Fraud: Indian Origin Bankim Brahmbhatt Accused Of $500M Loan Scam With Fake Invoices; Bankruptcy Details
New Delhi58 minutes ago
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American company BlackRock’s private credit unit HPS Investment Partners and global lenders like BNP Paribas have been involved in a fraud of $500 million i.e. about Rs 4,440 crore. Indian-origin telecom businessman Bankim Brahmbhatt is accused of defrauding all these global banks.
According to the report of Wall Street Journal, Bankim Brahmbhatt is accused of grabbing loans from these banks by creating fake telecom assets, invoices, emails and contracts. His fraud was caught in July 2024, after which his companies and Brahmabhatta himself went bankrupt.
Fraud by creating fake invoice-website
According to court filings, Brahmbhatt took loans through asset-based financing by collateralizing future customer payments. Fake invoices, fake emails and fake contracts were created.
Even fake websites resembling genuine telecom clients were created to deceive auditors and lenders. Every verification email of the last two years was fake and this fraud was going on since 2018. The total loan was valued at more than $500 million.
How the fraud was caught, revealed by the audit of HPS
In July 2024, an HPS employee noticed an error in the customer email address. On cross-verification, Belgian telecom company BICS said that it has no dealings with Bridgevoice and the emails are confirmed fraud attempts. After this, in the investigation by Deloitte and CBIZ, customer data, invoices and contracts were all proved to be fake.
Brahmabhatta’s office closed, bankruptcy filed
When contacted by the lenders, Brahmbhatt stopped the calls and emails. Investigators found the New York office locked, the house empty and luxury cars outside. According to reports, he has fled to India or Mauritius.
Broadband Telecom, Bridgevoice, Carioux Capital II and BB Capital SPV went bankrupt in August 2024. On August 12, Brahmbhatt filed personal bankruptcy.
The business was legitimate and investigation is incomplete: Lawyer
HPS’s exposure increased to $430 million (Rs 3,817 crore) from $385 million (Rs 3,418 crore) in 2021. BNP Paribas has kept a provision of $ 220 million (Rs 1,953 crore).
Brahmbhatt’s lawyer termed all the allegations as misleading and baseless. The lawyer says that the company’s business was legitimate and the investigation is incomplete.
Limited impact on BlackRock
BlackRock’s private credit unit HPS Investment Partners manages assets worth $179 billion i.e. Rs 15.89 lakh crore, so this loss is manageable.
But BlackRock has started a review of the due diligence and verification process in the private credit portfolio. All lenders will now try to recover from the bankruptcy court.
Who is Bankim Brahmbhatt?
Brahmbhatt has been active in International Telecom Services for a long time. He started companies such as Broadband Telecom and BridgeVoice, which wholesaled voice and data traffic between global carriers.
They had networks in America, Europe and Asia. Had an office in Garden City, New York and was associated with investment entities such as Carriox Capital-II and BB Capital SPV. He was considered successful as an NRI businessman, but now he is in a fraud case.
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