Money & Banking

The puzzling Canadian who wanted to save YES Bank

Bloomberg | Updated on December 10, 2019 Published on December 10, 2019

Erwin Singh Braich, the mysterious tycoon behind a $1.2-billion bid to rescue YES Bank, says he is Canada’s richest man with a story so fabulous that Netflix wants to tell it.

There is a less glittering account pieced together from interviews and court records: The son of a lumber baron has a history, including bankruptcy, lawsuits and soured business deals. He has no headquarters, no banker to manage his money, and is currently living in a three-star motel in the Canadian prairies.

YES Bank desperately needs the cash injection to replenish its core equity capital, which is barely above the regulatory minimum of 8 per cent. The stock has plunged 69 per cent this year, reducing its market value to $2 billion.

Braich says he has the money for the investment and has provided documentation to YES Bank’s CEO Ravneet Gill on his ability to pay.

Read also: Yes Bank to favourably consider Citax’s $500 million investment offer

“I have been under the radar,” said 63-year-old Braich. “We have a lot of different holdings and assets that people don’t know about. The funds will be in escrow by the time YES Bank shareholders meet this month to approve the capital-raising,” he added.

“I don’t think Mr Gill is a stupid man,” said Braich, adding a lot of skepticism will be erased surrounding his bid.

Yet there are plenty of signs from Braich’s past that some skepticism may be warranted. For two decades, he has been mired in dozens of lawsuits with family members, creditors and business associates, according to Canadian and US court records.

In one case, he pitched two investors on a plan to buy scrap metal from the Democratic Republic of Congo, telling them he had a multi-million-dollar commodity trading business, according to a 2008 lawsuit filed in New York.

Congo deal

The investors, Roger and Punit Menda, sued him and four others for defrauding them of $340,000, saying Braich lied about the metal contracts and did not possess the personal wealth he claimed to and, was, in fact, without any personal assets, according to the filing. Braich failed to respond to the complaint or appear in court, according to a default judgment ordering the money be repaid with interest.

Robin Phinney, former president of Canadian potash developer Karnalyte Resources, says he met Braich several times in 2015 when Braich said he was ready to fund a roughly C$2-billion ($1.5 billion) mining facility.

Braich jumped the gun with a news release that said his group was set to take control of Karnalyte and would make an immediate equity injection of nearly C$200 million. The company responded by saying the proposal was not binding and had not been accepted by the board.

The deal never happened, and Phinney said Karnalyte was unable to ascertain if Braich had the funding he claimed. “Everything looks wonderful until you have to show up with the check,” he said. “I still don’t know if he had any money or not.”

Braich says he had a binding bid with Karnalyte but they allowed another investor from Gujarat, India, to push him out. Several analysts have expressed skepticism about the potential new investors in YES Bank. The lender’s shares dropped 18 per cent in the week after the names were announced on November 29, including Braich, SPGP and Citax Holdings.

Braich grew up in Mission, British Columbia, 70 kilometers (44 miles) southeast of Vancouver, the eldest of six children in a Sikh family originally from Punjab in northern India.

His father Herman was a pillar of the local Indo-Canadian community who had left India at the age of 14 – taking little but the name of his tiny village, Braich – and built a fortune in British Columbia’s forestry industry. The patriarch died in 1976.

Published on December 10, 2019
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