Technology company Info Edge has taken the decision to initiate a forensic audit into the operations of 4B Networks, a prop-tech startup backed by Rahul Yadav. This action comes after Info Edge wrote off its entire investment in the company ON , as 4B Networks has failed to provide the requested financial information.
Yadav, known for his controversial tenure as the founder of Housing.com, faced termination from the company due to public clashes with investors. Subsequently, Yadav briefly worked with Anarock before launching 4B Networks.
According to a disclosure made by Info Edge to the stock exchanges, its subsidiary Allcheckdeals India invested a total of Rs 288 crore in 4B Networks. This investment comprised Rs 276 crore in shares and Rs 12 crore in debt financing.
Allcheckdeals has repeatedly sought specific details and particulars regarding financial transactions, including transactions with related parties, from 4B Networks and its current management. These details are contractually required to be provided by 4B Networks but have not been furnished, as stated in the filing by Info Edge.
The filing further highlighted that despite multiple requests, 4B Networks has consistently failed to supply the necessary information or respond to Info Edge's inquiries.
In the previous quarter, Info Edge had announced the complete write-down of its investment in 4B Networks, citing various factors such as excessive cash burn, liquidity challenges, and significant uncertainties regarding funding options.
Due to the absence of a response from 4B Networks and its failure to comply with information requests, Allcheckdeals has decided to exercise its contractual rights. Consequently, Info Edge's subsidiary, Allcheckdeals India, has taken the initiative to launch a forensic audit into the affairs of 4B Networks.
Deloitte Touche Tohmatsu India LLP has been appointed as the forensic auditor for this purpose, in accordance with the shareholders' agreement and articles of association of 4B Networks, as stated in the filing.