BlackRock Unit Sues Indian-Origin CEO for Alleged $500 Million Fraud, Disappearance

HPS Investment Partners, a private credit arm of BlackRock, has filed a lawsuit against Bankim Brahmbhatt, an Indian-origin CEO, accusing him of a "breathtaking" fraud totaling approximately $500 million (Rs 4,200 crore).

Brahmbhatt, known for his leadership in the telecoms industry, allegedly fabricated invoices and accounts receivable to use as collateral for significant loans granted to his companies, Broadband Telecom and Bridgevoice, which are part of the Bankai Group.

According to reports, Brahmbhatt established complex financing structures, including Carriox Capital and BB Capital SPV, to raise funds from private credit investors. HPS began lending to Brahmbhatt's firms in 2020, increasing its exposure significantly over the years.

The alleged fraud came to light during a routine check in July 2025 when an HPS employee discovered irregularities in customer email addresses used to verify invoices. These addresses belonged to fake domains impersonating real telecom companies. Brahmbhatt reportedly assured HPS there were no issues but subsequently became unreachable.

Brahmbhatt filed for bankruptcy on August 12, shortly before HPS filed its lawsuit. The lawsuit also claims that Brahmbhatt transferred loan collateral assets to offshore accounts in India and Mauritius.

Following the fraud allegations, Brahmbhatt's company offices in New York were found closed and deserted, and he was not present at his listed US residence. HPS believes he may have left the US and is hiding in India.

Impact: This news highlights significant risks in private credit markets and raises concerns about financial crime and the potential flight of individuals involved in fraud. For investors, it underscores the importance of due diligence in complex financing deals. The alleged transfer of assets to India also brings potential cross-border legal and recovery challenges. The rating for the impact on the Indian financial landscape, due to potential asset recovery and investigation involving Indian jurisdictions, is 6/10.

Difficult Terms Explained: Private Credit: Loans provided by non-bank financial institutions or private funds directly to companies, often bypassing traditional banks. It can be higher risk but also offer higher returns. Collateral: Assets pledged by a borrower to a lender as security for a loan. If the borrower defaults, the lender can seize the collateral. Financing Vehicles: Entities or structures created specifically to raise capital for a particular project or company. Offshore Accounts: Bank accounts held in a jurisdiction different from a person's or company's country of residence, often for tax or privacy reasons.