InfoEdge goes for forensic audit of Rahul Yadav’s startup 4B Networks, read notice to BSE – Times of India

InfoEdge, the parent company of Naukri.com and other websites, has reportedly initiated a forensic audit of its portfolio company 4B Networks, founded by Housing.com’s Rahul Yadav. According to a report in Economic Times, the reason for the same is not disclosing details of financial transactions and related-party activities when asked for by the investor.
InfoEdge revealed in a stock exchange filing that it has hired Deloitte to conduct a forensic audit of the property-tech startup. Founded in November 2020, 4B helps real estate developers and brokers communicate with each other and conduct business via the Broker Network Platform. It also helps brokers conduct site visits and provide home-loan-related services to clients.
Here’s the company’s notice on 4B Networks to BSE stock exchange:
Allcheckdeals India Private Limited (a wholly owned subsidiary of the Company) (“AIPL”) had made financial investment and provided funding from time to time to 4B Networks (which is engaged in the business of enabling real estate developers and brokers to communicate with each other and conduct their business through the ‘Broker Network’ platform and a platform for loan origination for end-consumers) – amounting to approx. INR 2,88, 00,00,000 (Rupees Two Hundred and Eighty Eight Crores) (i.e. investment of approx. INR 2,76,00,00,000 (Rupees Two Hundred and Seventy Six Crores) as investment into shares and INR 12,00,00,000 (Rupees Twelve Crores) as debt financing). As has been disclosed by us through our disclosure made under Regulation 30 & 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 dated February 10, 2023 and May 26, 2023, the investments into the shares of 4B Network and the loan have been fully impaired, in the backdrop of various factors including inter alia excessive cash burn, prevailing liquidity issues and significant uncertainty towards funding options.
In the backdrop of the various aforesaid issues, this is to inform you that AIPL has been, at various instances, seeking information, including details and particulars of financial transactions, transactions with related parties and such other aspects from 4B Networks and its current management, all of which are required to be provided to AIPL contractually under the shareholders’ agreement and articles of association of 4B Networks. 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. 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, who will be supported and assisted by Saraf and Partners Law Offices, legal advisors to the Company.