Naukri.com parent files FIR against 4B Networks founder for fraud

Info Edge, a prominent consumer internet group that owns Naukri.com and Shiksha.com, has filed an FIR against Rahul Yadav, the founder of 4B Networks, along with several associates, alleging financial irregularities. The FIR was lodged at Bandra Police Station, Mumbai, on November 29, 2024.

The complaint, submitted by Info Edge's subsidiary AIPL, accuses Yadav and others—including Devesh Singh, Pratik Choudhary, and Sanjay Saini—of engaging in fraudulent activities related to 4B Networks’ financial dealings. 4B Networks, founded by Yadav in November 2020, aimed to facilitate communication between real estate developers and brokers while also offering loan origination services for consumers.

Info Edge had invested Rs 288 crore in 4B Networks through its subsidiary, ALLcheckdeals India, and held a 59% stake in the company. However, issues arose when 4B Networks failed to provide mandatory operational and financial details, prompting Info Edge to launch a forensic audit last year.

The situation escalated in July 2023 when Info Edge approached the Delhi High Court and entered arbitration proceedings with 4B Networks. Subsequently, in August 2023, the company filed a complaint with the Economic Offences Wing (EOW), citing suspicious transactions between 4B Networks and a related entity, 4B Realtech Pvt Ltd, reportedly linked to Yadav.

The fallout resulted in Info Edge writing off its entire Rs 532 crore investment in 4B Networks. This figure includes the Rs 288 crore cash infusion and additional notional losses stemming from the startup’s prior valuation of Rs 719 crore.

Rahul Yadav, known for co-founding Housing.com and his high-profile rise in the startup world, has faced multiple controversies over the years. In 2015, Yadav made headlines for his bold leadership style and tumultuous relationship with investors. However, his journey with Housing.com came to an abrupt end in July of that year when the board terminated his role as CEO, citing allegations of misconduct.

This is not Yadav's first encounter with legal challenges. In 2023, the Economic Offenses Wing (EOW) of the Mumbai Police registered an FIR against him, accusing him of defrauding an advertising agency of more than Rs 10 crore.

Yadav’s ongoing legal troubles highlight the complexities of navigating the startup ecosystem, where rapid growth often collides with governance challenges.

Meanwhile, the ongoing investigation underscores concerns about corporate governance and accountability in startups, particularly those with significant investor backing.