Networks: Info Edge, Rahul Yadav’s 4B Networks to enter arbitration

NEW DELHI: The dispute between Info Edge and its portfolio company 4B Networks has reached arbitration after the management of the proptech startup led by Rahul Yadav failed to furnish details to the firm for conducting a forensic audit into its dealings. Info Edge which has backed a clutch of tech startups had invested in 4B Networks via its subsidiary Allcheckdeals India (AIPL). “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 failed to provide any such information or cooperate with AIPL advisors for conducting the forensic audit,” Info Edge said in a stock exchange filing on Wednesday.

Info Edge had initiated the forensic audit in June and had appointed Deloitte India to conduct the audit. The audit was mandated because the startup failed to provide information pertaining to its financial transactions and other related aspects all of which are required to be provided to AIPL contractually under the shareholders’ agreement and articles of association of 4B Networks. Info Edge earlier this year wrote off its entire investment of Rs 288 crore in 4B Networks.
“In the aforesaid backdrop, AIPL filed a petition before the 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 against 4B Networks, Mr. Rahul Yadav and Mr. Pratik Choudhary,” Info Edge said in the recent filing.

The High Court by way of an order issued on July 24 has directed 4B Networks, Yadav and Choudhary to “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,” the filing said.
The parties will appear before the arbitrator on August 14.