BlackRock backed lender alleges $500 million fraud by Indian origin telecom entrepreneur: Report

Bankim Brahmbhatt, the Indian-origin owner of US-based telecom firms Broadband Telecom and Bridgevoice, is facing allegations of orchestrating a multimillion-dollar fraud scheme, according to a report by The Wall Street Journal. American lenders, including BlackRock’s HPS Investment Partners, allege that Brahmbhatt fabricated accounts receivable that were used to secure over $500 million in loans. 

The WSJ reported that the lenders filed a lawsuit in August, accusing Brahmbhatt of misleading them by pledging fictitious revenue streams as collateral. His companies, now in Chapter 11 bankruptcy, allegedly owe more than half a billion dollars. 

The financing was supported by BNP Paribas, which helped HPS fund the loans to Brahmbhatt’s firms, the WSJ report said. HPS began lending to one of his financing arms in September 2020, expanded the debt exposure to about $385 million in early 2021, and again to approximately $430 million by August 2024. Sources told WSJ that BNP Paribas funded nearly 50% of the loans, which were distributed across two HPS credit funds. 

The dispute centers on a form of asset-based finance where collateral is tied to projected revenue streams from customer receivables or business assets. WSJ noted that this segment of the private-credit market has drawn attention in recent months due to similar cases involving alleged fraud. These include auto parts supplier First Brands and auto dealer chain Tricolor, both of which filed for bankruptcy after allegedly misusing off-balance-sheet debt and pledging non-existent assets. 

Brahmbhatt filed for personal bankruptcy on August 12, the same day his companies sought protection under Chapter 11. According to the US Courts website, Chapter 11 typically allows businesses to reorganise and continue operations while repaying creditors over time. 

WSJ journalists visited his office suite in Garden City, New York, and found it locked and seemingly vacated. Neighbours and nearby tenants said they had not seen activity in the area. A doorbell at a house listed as Brahmbhatt’s residence also went unanswered. 

Citing sources familiar with the matter, WSJ reported that HPS has raised concerns about Brahmbhatt possibly leaving the country for India. His attorney has denied all allegations made in the lawsuit.