‘We admit that Rahul Yadav’s 4B Networks was a mistake’: Info Edge CEO

Speaking to analysts here, Bikhchandani said, “We all make mistakes sometimes. Investors can also go wrong….I think we need to admit that 4B was a mistake. Companies go down but fraud is a different thing.”

The remarks came weeks after the company’s arm Allcheckdeals India wrote down all of its investment in the 4B Networks, which it had made because it had not received the requested financial information.

The company stated in a filing with the exchanges that its wholly owned subsidiary company Allcheckdeals India invested in and occasionally provided finance to 4B networks totaling ₹288 crore, of which ₹276 crore was invested in shares and ₹12 crore was debt financing.

The company’s arm has appointed Deloitte Touche Tohmatsu India LLP as the forensic auditor, who will be supported and assisted by Saraf and Partners Law.

Allcheckdeals had asked 4B Networks and its current management for information, ‘including details and particulars of financial transactions, transactions with related parties, and such other aspects,’ which 4B Networks is contractually required to provide but has not, Info Edge stated in the exchange filing.

As a result, Allcheckdeals India has exercised its contractual rights under the shareholders’ agreement and articles of association of 4B Networks and, in accordance with those rights, is initiating a forensic audit into the affairs of the investee company, i.e., 4B Networks.

Meanwhile, Info Edge (India) on Friday reported a standalone net profit of ₹200 crore for the first quarter of FY24, registering a growth of 34.7% from ₹148 crore in the same quarter of the previous fiscal. The company had posted a net loss of ₹503 crore in the March quarter (Q4FY23).

Info Edge’s standalone revenue from operations in Q1FY24 increased 15.1% to ₹584.2 crore from ₹507.6 crore in the year-ago period.

Updated: 12 Aug 2023, 01:38 PM IST