Info Edge Files Fraud Complaint Against Unit 4B Networks’ Rahul Yadav, Other Executives

Info Edge (India) Ltd., the operator of Naukri.com and Shiksha.com, has filed a first information report against its step-down subsidiary, 4B Networks Pvt.'s Founder Rahul Yadav and other executives, for alleged misuse of funds.

Info Edge and its wholly owned subsidiary—Allcheckdeals India Pvt.—have taken certain actions against its unit 4B Networks, it said in an exchange filing on Saturday.

The FIR was registered by the Bandra Police Station on Nov. 29, against Rahul Yadav, Devesh Singh, Pratik Choudhary, and Sanjay Saini alleging certain fraudulent acts, it said.

"Finally, an investor stands up and takes a stand," Deepak Shenoy, the founder and chief executive officer of global corporate finance advisory firm Capitalminds, said in a post on the social media platform X.

Info Edge had started an arbitration proceeding against 4B Networks last year, after it failed to provide details of financial transactions and disclosed crucial details. The company had appointed Deloitte to conduct a forensic report after its suspected misuse of funds.

Allcheckdeals India, the subsidiary of Info Edge, had invested Rs 288 crore—which included Rs 12 crore in debt financing—in 4B Networks. Later, in 2022, Info Edge wrote off its investment of Rs 276 crore.

The investment was impaired considering the "current state of affairs" and other relevant factors including "excessive cash burn, prevailing liquidity issue and significant uncertainty towards funding options." Info Edge Co-founder Sanjeev Bikhchandani had admitted that investing in 4B Networks was a mistake.

Yadav has been accused of misusing the Rs 276-crore funding he received from Info Edge for his startup. He allegedly transferred funds to a startup owned by his wife, given huge amounts as deposit for office space and given some big loans to ex employees, per reports. He was being investigated by the Economic Offences Wing of Mumbai Police as well.

Property tech startup 4B Networks was founded in November 2020, as a platform for real-estate developers and brokers to communicate to connect with each other and conduct business on the platform. It also offered services for loan origination for end-consumers.

Previously, Yadav had co-founded Housing.com in 2012 and was ousted from his position of Chief Executive Officer by the company's board of directors, citing bad behavior and conduct.