Telco Company Accused of Fraud by HPS Seeks to Subpoena Vendor
TL;DR
Broadband Telecom's restructuring officer seeks court approval to subpoena Indian vendor Bankai Infotech, linked to the bankrupt firm's founder, amid fraud accusations by lenders including HPS Investment Partners. The vendor holds company data and refused full disclosure during an audit, with broader misconduct scrutiny from US authorities.
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The chief restructuring officer for Broadband Telecom, a company that has been accused of fraud by lenders including HPS Investment Partners, is seeking court approval to initiate an examination into a key Indian vendor with links to the founder and owner of the bankrupt firm.
Bankai Infotech Limited. — which shares its name with the parent company of Broadband Telecom, Bankai Group — has access to the bankrupt company’s servers and keeps records including emails and customer data for it under an outsourcing agreement, according to court dated Wednesday.
The subpoenas were requested after John D. Baumgartner, Broadband Telecom’s chief restructuring officer, traveled to India for a site visit in mid-November to meet with representatives of Bankai Infotech in its offices and conduct an audit and the company refused to provide all information.
Bankim Brahmbhatt, founder of Bankai Group, is believed to have been a director of Bankai Infotech in the past, and some of his family members “may currently be associated” with it, according to court papers.
Broadband Telecom and Bridgevoice —another Bankai Group entity — have been accused of fraud by creditors after they discovered that the collateral backing their loans largely consisted of emails from fake domains and forged signatures. The loans are related to an asset-based facility backed by collateral such as consumer loans or trade receivables. The wide scope of potential misconducts also drawn scrutiny from US Attorney’s Office in Brooklyn, New York.
Bankai Infotech operates in Gujarat, India, according to its website. The lawyers are also seeking permission to examine several other US-based parties, including Panamax, which is part of the Bankai Group and owns Broadband Telecom’s servers in New York City and New Jersey, and Fidelity Capital, which is linked to the leases for those servers.
Broadband Telecom and Bridgevoice filed for bankruptcy in August. Brahmbhatt, who started building Bankai Group in 1989, has since filed for personal bankruptcy.