BlackRock among lenders hit by alleged fraud at two borrowers - report

[BlackRock San Francisco Office]
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BlackRock (BLK [https://seekingalpha.com/symbol/BLK]) and other private-credit lenders are facing steep losses after uncovering what they allege was a "breathtaking" fraud by two telecom-services firms, according to a media report on Thursday.

The owner of Broadband Telecom and Bridgevoic -- Bankim Brahmbhatt -- was sued in August by the lenders for allegedly fabricating invoices to obtain hundreds of millions of dollars in loans, the _Wall Street Journal _reported, citing a court filing.

French bank BNP Paribas (OTCQX:BNPQF [https://seekingalpha.com/symbol/BNPQF]) (OTCQX:BNPQY [https://seekingalpha.com/symbol/BNPQY]) helped the HPS Investment Partners unit of BlackRock (BLK [https://seekingalpha.com/symbol/BLK]) to make the loans, people familiar told the _WSJ_.

Earlier in the week, BNP (OTCQX:BNPQF [https://seekingalpha.com/symbol/BNPQF]) disclosed [https://seekingalpha.com/news/4509091-bnp-paribas-gaap-eps-of-779-revenue-of-1257b-reaffirms-2024-2026-trajectory] that its trading division took a €190M ($220M ) charge in Q3 to reflect "a specific credit situation."

Broadband entered bankruptcy in August, and an affiliate tied to Bridgevoice and Broadbrand also sought court protection earlier in October, the newspaper said [https://www.wsj.com/finance/blackrock-stung-by-loans-to-businesses-accused-of-breathtaking-fraud-6de5c3a7?gaa_at=eafs&gaa_n=AWEtsqd0r8c6RRnoO-ZFFnAVRA_syZN030sUzDQeMW6WnnJ-dP7KfaVcfsw__7TTWGo%3D&gaa_ts=690398e7&gaa_sig=ggpolk7_9U6qn-R1FH2sy4cJrt8KnxKdsdZOtp3BkIwUQ7rjH4YyT5exW4hJpch4Y7jLnmZqnBkSONtpr3Lcnw%3D%3D]. The affiliate reported up to $1B in liabilities and named BlackRock's (BLK [https://seekingalpha.com/symbol/BLK]) HPS arm among its creditors. HPS expanded its loan exposure to about $430M in last year's August.

Neither BlackRock (BLK [https://seekingalpha.com/symbol/BLK]) nor BNP (OTCQX:BNPQF [https://seekingalpha.com/symbol/BNPQF]) immediately responded to Seeking Alpha's request for comment.

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