Credit Fraud Fears Loom After BlackRock’s HPS Zeros Out Bad Loan

The ink was barely dry on BlackRock Inc.’s $12 billion acquisition of HPS Investment Partners when executives at the private credit giant realized one of their investments had gone horribly wrong.

HPS had teamed up with BNP Paribas SA to provide hundreds of millions of dollars to a group of companies run by little-known businessman Bankim Brahmbhatt, according to people with knowledge of the matter. HPS had taken the riskiest portion of the financing — which was purportedly backed by receivables from some of the world’s biggest telecommunications providers — eyeing double-digit returns, said the people, who asked not ...