Info Edge lodged an FIR at Bandra Police Station on November 29, 2024, accusing Rahul Yadav, 4B Networks’ founder and co-founder of Housing.com, along with Devesh Singh, Pratik Choudhary, Sanjay Saini, and unnamed others, of fraudulent activities.
The FIR follows a forensic audit initiated by Info Edge in 2023 after 4B Networks failed to provide critical financial information. Deloitte conducted the audit, uncovering discrepancies in financial transactions and related-party activities.
In a stock exchange filing, Info Edge confirmed:
“There shall be no material financial impact or effect on the company’s business operations on account of the FIR.”
Investment Gone Awry
Info Edge had invested Rs 288 crore (including Rs 12 crore in debt) in 4B Networks through its subsidiary, Allcheckdeals India Pvt Ltd (AIPL). Despite initial optimism about the startup’s growth, Info Edge wrote off Rs 276 crore in December 2022 due to high cash burn, liquidity challenges, and a weak funding environment.
Cofounder Sanjeev Bikhchandani later admitted the investment was a mistake, underscoring the challenges of managing high-risk startups.
About 4B Networks
Founded in November 2020, 4B Networks aimed to streamline real estate transactions by connecting brokers and developers through its Broker Network Platform. It also facilitated site visits and home-loan services for clients.
Despite its potential, the startup’s operational and financial issues led to mounting concerns for its investors.
Conclusion
Info Edge’s FIR against Rahul Yadav and others highlights growing accountability in India’s startup ecosystem. The case emphasizes the need for robust financial oversight and transparency, especially when dealing with substantial investments. As investigations unfold, the outcome will likely serve as a cautionary tale for investors and entrepreneurs alike.
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