Yes Bank was reportedly set to reject Braich's $1.2 billion bid in favour of institutional investors at its December 10 meeting.
Even as reports hinted that Yes Bank would reject Canadian industrialist Erwin Singh Braich's $1.2 billion bid in favour of institutional investors, Bloomberg has reported that Briach's claims may be under question.
The offer from Braich and Hong Kong-based SPGP Holdings had been expected to make up a bulk of Yes Bank's $2 billion fundraising plans but was clouded by concerns over certain foreign bidders being disallowed to acquire a stake in the bank by the Reserve Bank of India (RBI).
It has now emerged that Braich is allegedly involved in numerous lawsuits with creditors and family members.
Moneycontrol could not independently verify the report.
"I don’t think Mr Gill is a stupid man," he added.
Yet, the red flags raised by the publisher, dug from past interviews and court papers, include the fact that Braich, 63, has a history of bankruptcy, business deals gone wrong, and a dozen court cases in the United States and Canada.
Among the most concerning incidents include his "defrauding" investors Roger and Punit Menda and four others buying scrap metal from the Democratic Republic of Congo for $340,000. He allegedly claimed to own a multimillion-dollar commodity trading business, as per their 2008 lawsuit. Braich, on his part, claims the lawsuit did not beg attention as it was "so stupid and frivolous we did not bother to defend it".
Phinney, the former president of Canadian potash developer Karnalyte Resources Inc, also expressed doubts over Braich's claims. Phinney dealt with Braich in 2015 after the latter made an offer to fund $1.5 billion in the mining facility.
The deal was rejected by the board and fell through. Phinney said Karnalyte was unable to ascertain if Braich had the funding he claimed. On his part, Braich says he had a binding bid with Karnalyte but was deceived and allowed another investor from Gujarat to push him out.
Originally from a Punjabi Sikh family in India, Braich grew up in British Columbia, Canada. His father Herman left India at the age of 14 and built a fortune in British Columbia’s forestry industry. The patriarch died in 1976.
The eldest of six children, Braich claims the lawsuits against him are because he was a trustee for his father's estate. The estate came with a 1999 involuntary bankruptcy with more than C$13 million in total liabilities, as per Canadian bankruptcy records.
Responding to an email from Bloomberg, the Public Prosecution Service of Canada said that Braich was arrested and prosecuted after refusing to provide records of his assets or appear in court. But, Braich claims he has assets and has repaid his debt with interest.
To support the Yes Bank bid, Braich and his partner SPGP have said they jointly own $200 million worth Black Pearl Investments among other assets. On the Hong Kong companies registry, a firm named Black Pearl Investments had HK$1 in paid-up capital the last time it filed an annual return in November 2017.
When asked about his interest in Yes Bank, Braich said he "loved the logo and would not have been interested if it was called 'No Bank'."Analysts have also stated they would have serious reservations if the Yes Bank board accepts such investors. The bank did not respond to Bloomberg's queries.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.