In the middle of a flurry of cases, troubled 4B Networks’ cofounder Rahul Yadav and founding member Sanjay Saini have now approached a Mumbai Court seeking anticipatory bail.
As per CNBC-TV18, the duo have sought bail in connection with a first information report (FIR) filed by Vikas Nowal, country head and cofounder of Interspace Communications, against Yadav for alleged fraud and cheating with the Economic Offences Wing (EOW).
The Mumbai police plans to oppose this anticipatory bail application, according to the report.
The duo is being questioned by the agency for the past few days. During interrogation, both Yadav and Saini insistently told the agency sleuths that they would pay the money owed to Interspace, although they refrained from giving a reason for the initial default.
Earlier this month, Nowal filed an FIR with the EOW under sections 406, 409, 420, 34 of the Indian Penal Code, alleging criminal breach of trust and fraud amounting to INR 10 Cr. At the centre of the dispute is the advertising agency Interspace Communications which Broker Network empaneled to undertake outdoor ad campaigns in February 2022.
According to the FIR, Interspace installed 83 ad hoardings in Pune from April to August 2022. Nowal has alleged that Broker Network has defrauded Interspace and is yet to make the INR 10 Cr payment for the ad activity undertaken in 2022.
Inc42 first broke the story back in June this year, which delved into how Interspace was one of the many vendors that the troubled startup has not paid.
The development came around the same time as the Delhi High Court, while hearing an arbitration case filed by coworking space provider Innov8, noted that 4B Networks had forfeited its right to file a response in the matter. This forfeiture occurred because the startup failed to file a response despite being given a “last opportunity” to do so for not paying rent amounting to INR 1.08 Cr to Innov8.
Added to that, Broker Network is embroiled in another arbitration proceeding with its investor InfoEdge. After investing INR 288 Cr in the Rahul Yadav-led startup, the investor had to write down the investment due to allegations of financial misconduct.
Yadav refused to disclose financial transactions and related-party activities details during a forensic audit initiated by Info Edge, which led to full-blown arbitration proceedings.
The investor has also approached the Delhi High Court against Yadav and Pratik Choudhary, who was also a party to the shareholders’ agreement of 4B Networks. According to Info Edge, the HC has directed Yadav and Choudhary to not sell, transfer or alienate any assets or properties of 4B Networks and to preserve all records and information.
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