₹280 crore ‘vanished’: Info Edge initiates foreign audit into Rahul Yadav-backed 4B Networks
1 min read 02 Jun 2023, 08:26 AM ISTInfo Edge is initiating a forensic audit into proptech startup 4B Networks after the firm failed to provide requested financial information.
PremiumAfter failed attempts to seek asked financial information from proptech startup 4B Networks, Info Edge announced to initiate a forensic audit into the Rahul Yadav-backed firm. The move has come in response to 4B Network's failure to provide asked financial information to investor Info Edge.
Rahul Yadav is known for founding Housing.com and then ending up losing the position in the firm after repeated public spats with investors. He also worked with Anarock before founding 4B Networks.
Info Edge's subsidiary Allcheckdeals India invested in as well as provided frequent funding to 4B networks, the company said in it stock exchange filling. The funding amounted to ₹288 crore- ₹275 crore as investment into shares and ₹12 crore as debt financing.
The proptech firm was asked about "details and particulars of financial transactions, transactions with related parties and such other aspects from 4B Networks and its current management." 4B Networks is legally bount to give all the previously mentioned details, but failed to give any of the latest info, 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.
“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.
In its previous quarterly report, Info Edge mentioned the entire investment in 4B Networks and the loan as fully impaired. The classification of the investment as the same was the result of "various factors including inter alia excessive cash burn, prevailing liquidity issues and significant uncertainty towards funding options."
The action has been taken after lack of proper response from 4B Networks to the requests of information from Allcheckdeals. The action has been taken as per the agreement and articles of association of 4B Networks and pursuant to the same. The company has appointed Deloitte Touche Tohmatsu India LLP in this case.
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