Info Edge Files FIR Against Rahul Yadav, Alleges Fund Misuse in 4B Networks

Info Edge, an Indian consumer internet company, has filed FIR against former Housing.com chief executive officer Rahul Yadav accusing him of fraud and misuse of funds allocated to his proptech startup 4B Networks.

According to media reports, the FIR filed on November 29 in Bandra Police Station said that Allcheckdeals India Private Limited (AIPL) had taken certain actions in relation to its subsidiary 4B Networks Private Limited. It also named Devesh Singh, Pratik Choudhury and Sanjay Saini along with Yadav and others, in connection with 4B Networks accusing "inter alia commitment of certain fraudulent acts involving 4B Networks' funds.

However, the company stated that the FIR would not have any significant financial impact on its business operations.

The Story So Far

In 2021, Sanjiv Bhikchandani-led Info Edge held around 59 per cent stake worth Rs 288 crore in 4B Networks through its wholly owned subsidiary AIPL. 4B Network was established in November 2020 by Yadav, who was fired in 2015 from his real estate search portal Housing.com founded in 2012. he was ousted following a reported public dispute with investors. 

Yadav created 4B Networks to give real-estate developers and brokers a platform to communicate and conduct business. Despite substantial support from Info Edge, reportedly 4B Networks failed to meet salary payments, vendor commitments, and exhibited any other major shortcomings in corporate governance.

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In 2023, Info Edge launched a forensic audit after 4B Networks failed to fulfill its contractual obligation to disclose essential information regarding its operations, financial activities, and related-party dealings. Following this, AIPL filed a petition before the Delhi High Court pointing out various alleged contractual breaches by 4B Networks and Yadav.

Earlier, Info Edge wrote off its equity investment of Rs 276 crore in 4B Networks due to excessive cash burn, liquidity issues and uncertainty toward funding options. As per media reports, Info Edge revealed in a note to its investors that suffered a total loss of Rs 532 crore from writing off its investment in 4B Networks. Earlier to the write-off, 4B Networks had a valuation of Rs 719 crore.