Consumer internet group Info Edge has filed an FIR against Rahul Yadav, the founder of its portfolio company 4B Networks, and a few others, alleging misuse of funds.
"Pursuant to a complaint filed by AIPL, a first information report (FIR) has been registered by the Bandra Police Station (Mumbai Police) on November 29, 2024 against Rahul Yadav, Devesh Singh, Pratik Choudhary, Sanjay Saini (and unnamed others) in connection with 4B Networks (an indirect subsidiary of the company), alleging inter alia commitment of certain fraudulent acts involving 4B Networks’ funds," the company said in an exchange filing.
4B Networks was rolled out in November 2020 by Housing.com founder Rahul Yadav, and was created to enable real-estate developers and brokers to communicate with each other and conduct their business through its platform. It also helped in loan origination for end-consumers.
Sanjiv Bhikchandani-led Info Edge which, among other things, operates the Naukri.com jobs portal, had invested a total of Rs 288 crore in 4B Networks through its wholly owned subsidiary ALLcheckdeals India in multiple tranches since early 2021, and held about 59 percent stake.
Last year, a forensic audit was initiated by Info Edge after 4B Networks failed to provide the company with information about operations and management, details and particulars of financial transactions, and transactions with related parties, which it says it was contractually obligated to receive.
Info Edge then approached the Delhi High Court in July last year, and the two companies went into arbitration as mandated by the court. The group filed its complaint with the Economic Offense Wing (EOW) in August 2023 accusing the 4B Networks and its founder Yadav of undertaking ‘suspicious transactions’ with 4B Realtech Pvt Ltd, a company allegedly started by an associate of Yadav.
Info Edge suffered a total loss of Rs 532 crore from writing off its investment in 4B Networks, the company had disclosed in a note to investors. While Info Edge’s cash infusion in the startup stood at Rs 288 crore, the rest is the notional loss from a higher valuation that the startup commanded earlier. The startup had a valuation of Rs 719 crore before Info Edge had to write down its entire investment.
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