Global asset-manager BlackRock’s private-credit arm and associated lenders are pursuing recovery of over $500 million following allegations that two telecom-services companies concealed the true state of their finances. The companies, linked to entrepreneur Bankim Brahmbhatt and identified as Broadband Telecom and Bridgevoice, are accused of presenting fabricated accounts-receivable as collateral for large asset-based loans.
The lenders’ lawsuit, filed in August, asserts that Brahmbhatt’s firms pledged fictitious revenue streams and transferred assets meant as collateral to offshore accounts in India and Mauritius to secure financing. According to court filings, BlackRock’s HPS Investment Partners unit began lending to one of the firms in September 2020 and increased exposure to about US$385 million in early 2021, climbing to roughly US$430 million by August 2024. Approximately half of that sum was funded by BNP Paribas, according to people familiar with the deal.
Detailed scrutiny by auditors and legal advisers discovered that invoices stretching back to 2018 were backed by email confirmations sent from domains that mimicked those of legitimate telecom companies. One creditor’s review concluded that every customer email supplied during the verification process for the past two years was fake. When questioned, Brahmbhatt allegedly assured lenders that nothing was amiss — but later ceased responding altogether.
The lending firms visited Brahmbhatt’s Garden City, New York offices in July and found them locked and deserted. Neither the office suite nor his listed residence yielded any response when approached. Brahmbhatt’s lawyer maintains that the CEO contests the allegations.
Industry observers say the case highlights systemic risks in the private-credit market, a sector that has grown rapidly and often operates with less regulatory oversight than traditional bank lending. Asset-based financing, the kind at the centre of this dispute, relies on borrowers pledging receivables or equipment as collateral — a structure particularly vulnerable when borrower transparency is limited. The alleged fraud in this instance may prompt institutional investors and regulators to reassess due-diligence processes and transparency standards.
BlackRock, which oversees more than US$10 trillion in assets, has indicated that the exposure to this matter is contained — one internal note reported that HPS’s funds total about US$179 billion and that the loss would not threaten overall fund performance. Nonetheless, the reputational implications for both lenders and borrowers in this niche market are significant.
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