BlackRock-backed private credit giant HPS Investment Partners has taken a major hit after discovering what court filings describe as an “extraordinarily brazen” fraud tied to telecom entrepreneur Bankim Brahmbhatt and his companies.
Shortly after BlackRock completed its $12 billion acquisition of HPS, employees uncovered that receivables backing loans issued to Brahmbhatt-run firms — including Broadband Telecom and Bridgevoice — were allegedly fabricated using fake email domains and forged signatures. According to people familiar with the matter, HPS has fully written off about $150 million tied to the deal.
The financing, arranged with BNP Paribas, was reportedly backed by receivables linked to major global telecom carriers, promising double-digit returns. However, lawsuits in New York and Delaware allege Brahmbhatt’s companies diverted funds offshore to Mauritius and India, misled lenders with falsified documents, and paid loan interest using new debt — a pattern drawing comparisons to other recent private credit frauds.
The fallout forced entities tied to Brahmbhatt to file for bankruptcy, prompting lenders to declare defaults in July after discovering the collateral did not exist. HPS funds affected fall under its $3 billion Asset Value strategy, now expected to post returns near the lower end of its 9–11% target range.
The episode comes amid rising scrutiny of asset-based financing in private credit, following collapses at Tricolor Holdings and First Brands. While BNP recorded a €190 million trading loss tied to what it called a one-off “specific credit situation,” HPS maintains a far larger $180 billion AUM buffer around the impact.
Brahmbhatt, founder of the India-origin Bankai Group, is currently in India and has not confirmed plans to return to the US, according to court filings. His legal representatives did not comment.
