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Fake Invoices Used To Dupe Private Lending Firm

Observant1
edited 5:05PM in Other Investing
HPS Investment Partners, founded by Goldman Sachs alumni, was acquired by BlackRock last July.
The firm was the lead lender to telecom entrepreneur Bankim Brahmbhatt.
Accounts receivable acquired from other businesses was used as collateral.
HPS later noticed invoice discrepencies and accused Mr. Brahmbhatt of "breathtaking fraud"—
they alleged the collateral was worthless.

"The wipeout of HPS’s loan took Wall Street by surprise.
How could one of the most sophisticated private-lending firms in the world be so badly duped?
Why didn’t anyone spot the issue before BlackRock, the world’s largest asset-management firm,
sealed its deal with HPS? Could similar frauds be lurking in the $3 trillion dollar private-lending industry?"

It appears that several red flags were present and should have drawn scrutiny.
If this information was available, HPS Investment Partners failed to perform proper due diligence.

https://www.msn.com/en-us/money/companies/how-fake-invoices-duped-blackrock-unit-into-a-400-million-loan/ar-AA1W5YGc

Comments

  • yogibearbullyogibearbull
    This WSJ story is an update on the old WSJ story in 11/2025 discussed under a MFO thread on the problems of private-credit.
    https://www.mutualfundobserver.com/discuss/discussion/comment/200883/#Comment_200883

    Unfortunately, several months have passed and this WSJ update doesn't mention any resolutions except that big and famous institutions wrote off their losses stating that they wasn't material to their balance sheets.

    But $400-500 million fraud is HUGE! The guy basically ran a chain of telecom services and financing companies only on paper for 5 years.
  • Old_JoeOld_Joe
    Maybe I can ask Claude how to do that and use the money to underwrite MFO.
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