Who's Bankim Brahmbhatt, Indian-origin CEO BlackRock accuses of $500M fraud?
What's the story
Bankim Brahmbhatt, an Indian-origin businessman and the CEO of US-based telecom companies Broadband Telecom and Bridgevoice, has been accused of a multi-million-dollar fraud by American investment giant BlackRock. The company's private credit arm, HPS Investment Partners, claims that Brahmbhatt's firms fabricated accounts receivable used as collateral for loans worth over $500 million. Despite the allegations, Brahmbhatt's lawyer has denied any wrongdoing on his client's part.
Business background
Brahmbhatt started his career in 1989
Brahmbhatt is the founder, president, and CEO of Bankai Group, a telecommunications and fintech company based in the US. He started his career in 1989 by establishing a push-button telephone manufacturing unit in India. His business interests later expanded into satellite dishes, telecom billing systems, and digital financial services. The flagship product of Bankai Group is MobiFin Elite, which offers digital financial services to clients across several countries.
Fraud details
Allegations of fraud and misrepresentation
The allegations against Brahmbhatt came to light when an HPS employee found that some customer emails appeared to be from fake domains mimicking real telecom firms. Despite Brahmbatt's assurances that there was nothing to worry about, further investigations by accounting firm CBIZ and law firm Quinn Emanuel revealed falsified emails and invoices as proof of receivables. A Belgian telecom company, BICS, confirmed it had no connection with the emails used by Brahmbhatt's firms, calling it a "confirmed fraud attempt."
Bankruptcy filings
Bankruptcy filings and financial fallout
Brahmbhatt's companies, including Broadband Telecom and Bridgevoice, filed for bankruptcy in August. This was the same month when lenders sued them. BNP Paribas also reported adding €190 million (around $220 million) in loan-loss provisions linked to a "specific credit situation," though it did not name the borrower. Despite these developments, sources told The Wall Street Journal that this incident is just a fraction of HPS's $179 billion assets under management and won't materially impact BlackRock's overall performance.
Legal proceedings
Brahmbhatt remains untraceable
HPS suspects that Brahmbhatt is currently in India. A visitor to his companies' New York offices found them closed and vacant in July. On the same day his companies sought Chapter 11 protection, Brahmbhatt also filed for personal bankruptcy on August 12. Now, US courts are overseeing the bankruptcy proceedings and civil lawsuits against him. Brahmbhatt remains missing as investigations continue into full extent of the alleged fraud and its potential impact on BlackRock's private credit arm and BNP Paribas.