Info Edge has not received crucial information from Rahul Yadav's 4B Networks, despite repeated requests, as part of the forensic audit the company initiated, the company said in a filing with stock exchanges on July 26. This comes nearly two months after Info Edge said that the forensic audit was being initiated into 4B Networks.
Info Edge previously wrote down its entire investment of Rs 288 crore in 4B Networks. The audit was initiated after 4B Networks, under Rahul Yadav, failed to provide the company with information about operations and management, details and particulars of financial transactions, and transactions with related parties, which it says it was contractually obligated to receive.
“Despite the initiation of the Forensic Audit by AIPL and repeated requests for crucial information in furtherance of the Forensic Audit, the management of 4B Networks (led by Mr. Rahul Yadav) failed to provide any such information or cooperate with the advisors of AIPL for conducting the Forensic Audit,” the filing by Info Edge read. AIPL is Allcheckdeals India Private Limited, the subsidiary through which Info Edge invested in 4B Networks.
Info Edge said after it did not receive any information and access for the forensic audit, it sent a legal notice and also filed a petition before the Delhi High Court for protection under relevant sections of the Arbitration and Conciliation Act.
“In the aforesaid backdrop, AIPL filed a petition before the Hon’ble Delhi High Court for interim measures of protection under Section 9 of the A&C Act, and subsequently under Section 37 of the A&C Act (“Petition”) against 4B Networks, Mr. Rahul Yadav and Mr. Pratik Choudhary (i.e., a party to the shareholders’ agreement of 4B Networks),” it said.
An order by the Delhi High Court on July 24 states that the parties in question have agreed to proceed to arbitration, and will appear before the arbitrator on August 14.
The order also states that the 4B Networks, Yadav and Choudhary “shall not sell, transfer, alienate, encumber or otherwise create any third party rights or interest directly or indirectly in the assets and properties” of 4B Networks. It also requires them to preserve all books, records, accounts, databases, servers, any other devices, documentation or information till the application for interim measures of protection by the arbitrator.
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