BlackRock, BNP Paribas, and the $500 Million Private Credit Fraud Scandal orchestrated by Bankim Brahmbhatt using Mauritius

In a stunning revelation that has sent shockwaves through the private-credit and asset-based lending markets, global financial giants BlackRock and BNP Paribas are now embroiled in a $500 million fraud scandal allegedly orchestrated by Indian-origin telecom entrepreneur Bankim Brahmbhatt.

In what is being described as a "breathtaking" act of financial fraud, global investment firm BlackRock's private-credit investing arm and several major lenders are now scrambling to recover more than $500 million in losses from a loan fraud allegedly orchestrated by Indian-origin telecom executive Bankim Brahmbhatt.

According to an exclusive report by the Wall Street Journal, the lenders, including BlackRock's HPS Investment Partners, have accused Brahmbhatt, the owner of telecom-services firms Broadband Telecom and Bridgevoice, of fabricating invoices and accounts receivable that were pledged as collateral for massive loans.

The suit, filed in August in the United States, alleges that Brahmbhatt's network of companies built an illusion of financial health on paper while moving money offshore to India and Mauritius.

The scheme

The scheme, described by insiders as “breathtaking” in scale and deception, involved Brahmbhatt’s companies — Broadband Telecom, Bridgevoice, and affiliated entities under the Bankai Group — fabricating customer invoices and receivables to secure massive loans from lenders including BlackRock’s HPS Investment Partners, a private-credit arm recently acquired by the asset management firm. [ndtv.com]

The Anatomy of the Fraud

According to court filings and investigative reports, Brahmbhatt allegedly:

• Created fake customer invoices and forged email domains to impersonate legitimate telecom clients.
• Used these fictitious receivables as collateral to obtain loans totalling over $500 million.
• Transferred pledged assets to offshore accounts in India and Mauritius.
• Built fake websites and fraudulent contracts dating back to 2018 to mislead auditors and lenders. [telecom.ec…atimes.com]

The fraud came to light in July 2025, when an HPS employee noticed irregularities in customer email addresses. Subsequent investigations by accounting firms Deloitte and CBIZ, and law firm Quinn Emanuel, revealed that every customer email used to verify invoices over the past two years was fraudulent.

A Belgian telecom company, BICS, confirmed it had no connection to the emails provided by Brahmbhatt’s firms, calling it a “confirmed fraud attempt”. [timesofind…atimes.com]

BNP Paribas’ Role and Exposure

• French banking giant BNP Paribas reportedly financed nearly half of the loans extended to Brahmbhatt’s companies, including Carriox Capital.
• The bank has since set aside approximately €190 million (USD 220 million) in loan-loss provisions linked to the case, although it has declined to comment publicly. [timesofind…atimes.com]

Fallout and Legal Action

The fraud has triggered a wave of legal and financial repercussions:

• Brahmbhatt and his companies filed for Chapter 11 bankruptcy in August 2025, the same month lenders filed suit.
• His Garden City, New York, offices were found locked and deserted, and his social media accounts vanished shortly after the scandal broke.
• BlackRock and other lenders are now scrambling to recover hundreds of millions in losses, with investigations ongoing into the full scope of the deception. [financialexpress.com]

Implications for the Private-Credit Market

• This scandal has exposed vulnerabilities in the asset-based lending sector, where loans are secured against projected receivables. The incident raises serious questions about due diligence practices and the reliability of collateral verification in private-credit deals.
• While BlackRock’s overall exposure may be limited relative to its $179 billion in assets under management, the reputational damage and regulatory scrutiny could be significant. [timesofind…atimes.com]

Source

• https://www.ndtv.com/world-news/bankim-brahmbhatt-blackrock-indian-origin-ceo-stings-blackrock-with-breathtaking-500-million-fraud-9553807
• https://telecom.economictimes.indiatimes.com/news/industry/blackrock-exposed-indian-telecom-mogul-bankim-brahmbhatt-allegedly-orchestrates-massive-500-million-fraud/125012309
• https://telecom.economictimes.indiatimes.com/news/industry/blackrock-exposed-indian-telecom-mogul-bankim-brahmbhatt-allegedly-orchestrates-massive-500-million-fraud/125012309