Info Edge Files Fraud Complaint against 4B Networks Founder
03 Dec 2024
2 Min Read
CW Team
Info Edge, the parent company of the job portal Naukri, has lodged a First Information Report (FIR) against Rahul Yadav, the founder of its portfolio company 4B Networks, along with others, over allegations of fraudulent activities involving the misuse of funds.
In a stock exchange filing on Saturday, Info Edge disclosed that the FIR was registered by the Bandra Police Station (Mumbai Police) on 29 November 2024. The complaint names Rahul Yadav, along with Devesh Singh, Pratik Choudhary, and Sanjay Saini, among others, accusing them of engaging in fraudulent activities related to 4B Networks' funds.
The issue traces back to July 2023 when Info Edge initiated arbitration proceedings against 4B Networks after the company failed to provide critical information about its operations and management. This prompted Info Edge to appoint Deloitte to conduct a forensic audit, which sought clarity on financial transactions and related-party dealings. Despite this, Info Edge assured that the FIR would have no material financial impact on its operations.
In the December 2022 quarter, Info Edge wrote off its equity investment of Rs 2.76 billion in 4B Networks, citing excessive cash burn, liquidity challenges, and uncertainty in funding prospects. The decision was described as a conservative measure, despite the startup's initial promise of strong growth. Info Edge co-founder Sanjeev Bikhchandani later admitted that the investment in 4B Networks was a mistake.
Founded in November 2020, 4B Networks aimed to facilitate communication and transactions between real estate developers and brokers through its Broker Network Platform. The company also supported brokers in conducting site visits and providing home loan services to clients. Info Edge, through its subsidiary Allcheckdeals India Pvt Ltd (AIPL), had invested ?2.88 billion in 4B Networks, including Rs 120 million as debt financing.
The unfolding case highlights challenges faced by investors in ensuring transparency and accountability in high-growth startups, particularly in sectors like real estate technology.
Info Edge, the parent company of the job portal Naukri, has lodged a First Information Report (FIR) against Rahul Yadav, the founder of its portfolio company 4B Networks, along with others, over allegations of fraudulent activities involving the misuse of funds.
In a stock exchange filing on Saturday, Info Edge disclosed that the FIR was registered by the Bandra Police Station (Mumbai Police) on 29 November 2024. The complaint names Rahul Yadav, along with Devesh Singh, Pratik Choudhary, and Sanjay Saini, among others, accusing them of engaging in fraudulent activities related to 4B Networks' funds.
The issue traces back to July 2023 when Info Edge initiated arbitration proceedings against 4B Networks after the company failed to provide critical information about its operations and management. This prompted Info Edge to appoint Deloitte to conduct a forensic audit, which sought clarity on financial transactions and related-party dealings. Despite this, Info Edge assured that the FIR would have no material financial impact on its operations.
In the December 2022 quarter, Info Edge wrote off its equity investment of Rs 2.76 billion in 4B Networks, citing excessive cash burn, liquidity challenges, and uncertainty in funding prospects. The decision was described as a conservative measure, despite the startup's initial promise of strong growth. Info Edge co-founder Sanjeev Bikhchandani later admitted that the investment in 4B Networks was a mistake.
Founded in November 2020, 4B Networks aimed to facilitate communication and transactions between real estate developers and brokers through its Broker Network Platform. The company also supported brokers in conducting site visits and providing home loan services to clients. Info Edge, through its subsidiary Allcheckdeals India Pvt Ltd (AIPL), had invested ?2.88 billion in 4B Networks, including Rs 120 million as debt financing.
The unfolding case highlights challenges faced by investors in ensuring transparency and accountability in high-growth startups, particularly in sectors like real estate technology.
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