Entrepreneur Sanjeev Bikhchandani’s Info Edge is initiating a forensic audit of 4B Networks after writing off its investment into the broker network earlier this year.
The Naukri parent has appointed Deloitte Touche Tohmatsu India LLP as the forensic auditor, the company said in a stock exchange filing on Thursday. Saraf and Partners Law Offices will be the legal advisors.
4B Networks, led by Housing.com’s founder Rahul Yadav, hasn’t shared its financial information and details about other party transactions with Info Edge, despite a contract agreement.
“4B Networks has repeatedly failed to provide such information and has also not responded to the information requests by the company on several occasions,” Info Edge said.
Noida-based Info Edge had invested Rs 288 crore ($35 million) in the proptech startup via its subsidiary Allcheckdeals India. This included Rs 276 crore equity investment and Rs 12 crore of debt financing.
InfoEdge had close to 57% stake in 4B Networks, which is the legal entity of Broker Network.
After its first capital infusion in 2020, Info Edge had added Rs 90 crore in the network as of last September. Founded in 2020 by Yadav, Broker Network runs online and app-based platforms to connect real estate developers and brokers and conduct their businesses.
However, it wrote off its investment in February this year amid funding issues. The startup was going through excessive cash burn amid uncertainty on funding options.
“We are writing down the investment in light of the current state of the environment and the significant uncertainty towards funding options available to 4B in future,” Hitesh Oberai, InfoEdge’s chief executive, had said during its analyst call last quarter.
Prior to Broker Network, Yadav cofounded SoftBank-backed Housing.com. He left the startup in 2015 after a spat between the company’s investors. The proptech startup was later merged with PropTiger in 2017. He was also associated with real-estate tech company Anarock Technology for close to four years.