Info Edge is initiating a forensic audit into Rahul Yadav-backed proptech startup 4B Networks, a quarter after it wrote down its entire investment in the company as the company hasn't given details of financial information that has been asked for.
Yadav, infamous for being the founder of Housing.com and then was fired from the company following several public spats with investors, had done a stint with Anarock before starting 4B Networks.
In a filing with the exchanges, Info Edge said its subsidiary Allcheckdeals India invested in as well as provided funding from time to time to 4B networks, which amounted to Rs 288 crore — Rs 276 crore as investment into shares and Rs 12 crore as debt financing.
Allcheckdeals has sought information, “including details and particulars of financial transactions, transactions with related parties and such other aspects from 4B Networks and its current management,” which 4B Networks is contractually obligated to give but has not, Info Edge said in the filing.
“However, 4B Networks has repeatedly failed to provide AIPL with such information and has also not responded to the information requests by the Company on several occasions,” the filing added.
Last quarter, Info Edge had informed that it had written down its entire investment in 4B Networks and the loan fully impaired “in the backdrop of various factors including inter alia excessive cash burn, prevailing liquidity issues and significant uncertainty towards funding options.”
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Since 4B Networks has not responded to requests for information, Allcheckdeals is exercising its contractual rights.
“As a consequence thereof, AIPL has exercised its contractual rights under the shareholders’ agreement and articles of association of 4B Networks and pursuant to the same, is initiating a forensic audit into the affairs of the investee company, i.e., 4B Networks and has appointed Deloitte Touche Tohmatsu India LLP as the forensic auditor in this regard,” the filing said.
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