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In response to the ongoing refusal by 4B Networks to disclose key financial data, Info Edge has chosen to commence a forensic audit of the proptech startup, which is under the stewardship of Rahul Yadav. This action has been triggered by a repeated inability on the part of 4B Networks to comply with financial transparency requests from Info Edge, their primary investor.
Yadav, a familiar name in the proptech arena, was the founder of Housing.com before he was ousted following a series of public clashes with investors. Prior to launching 4B Networks, he also served at Anarock.
Through its affiliate, Allcheckdeals India, Info Edge has not only invested in 4B Networks but has also been a consistent financial backer, as reported in their stock exchange filing. Total funding extended to 4B Networks by Info Edge through equity investment and debt financing amounts to Rs.288 crore.
According to the filing, 4B Networks has been persistently requested to disclose "details and particulars of financial transactions, transactions with related parties and other such aspects." Despite the legal obligation, the company has continually failed to offer any recent information, thus sparking concern at Info Edge.
Info Edge, in its previous quarterly report, had classified its entire investment in 4B Networks as 'fully impaired', citing "excessive cash burn, liquidity issues, and significant uncertainty regarding future funding options" among the determining factors.
In the face of 4B Network's silence and lack of cooperation, Allcheckdeals has taken the step to institute an audit as per the agreement and articles of association of 4B Networks. Deloitte Touche Tohmatsu India LLP has been nominated as the forensic auditor in this matter.
In conclusion, this unprecedented audit at 4B Networks is a critical juncture for Rahul Yadav, marking another tumultuous chapter in his professional journey. While the results of the audit are awaited, the situation underscores the importance of transparency and accountability in startup finance, especially when significant investor funds are at stake.
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