Info Edge Registers FIR Against Rahul Yadav for 4B Networks Fraud
Info Edge, a leading consumer internet group, files an FIR against Rahul Yadav and others over accusations of fraudulent activities involving 4B Networks' funds.
Info Edge4b NetworksRahul YadavFraudFirReal Estate NewsDec 01, 2024
Rahul Yadav, who is also a co-founder of Housing.com, has been named along with Devesh Singh, Pratik Choudhary, and Sanjay Saini in the FIR. The allegations stem from the startup's failure to provide crucial financial details, which led Info Edge to initiate a forensic audit. This audit was entrusted to Deloitte, a leading audit firm, after 4B Networks failed to disclose details of financial transactions and related-party activities sought by the investor.
Info Edge, the parent company of the popular jobs listing portal Naukri, had invested Rs 295 crore in 4B Networks. The company's decision to file the FIR comes after a series of breaches and the failure of 4B Networks to comply with audit requirements. In a stock exchange filing, Info Edge stated, “There shall be no material financial impact or effect on the company’s business operations on account of the FIR.”
The forensic audit was initiated in July of the previous year, following 4B Networks' failure to provide key financial details. This led Info Edge to write off its equity investment of Rs 276 crore in 4B Networks during the December 2022 quarter. The write-off was attributed to excessive cash burn, prevailing liquidity issues, and uncertainty regarding funding options. Info Edge had noted that while the startup showed strong growth, the high cash burn and the overall funding environment necessitated the write-off, following the principles of conservatism.
Sanjeev Bikhchandani, co-founder of Info Edge, has publicly admitted that investing in 4B Networks was a mistake. Founded in November 2020, 4B Networks aimed to facilitate communication and business operations between real estate developers and brokers through its Broker Network Platform. The platform also offered services such as site visits and home-loan assistance to clients.
Info Edge’s subsidiary, Allcheckdeals India Pvt Ltd (AIPL), had invested Rs 288 crore in 4B Networks, including Rs 12 crore as debt financing. The legal action taken by Info Edge underscores the company's commitment to protecting its investments and maintaining the integrity of its operations in the highly competitive consumer internet sector.
Despite the FIR, Info Edge remains committed to its core mission of providing innovative and reliable services to its users and stakeholders. The company continues to lead in the jobs and real estate sectors with its robust platforms and strategic investments.
Frequently Asked Questions
What is the total investment Info Edge made in 4B Networks?
Info Edge invested Rs 295 crore in 4B Networks.
Why did Info Edge file the FIR against Rahul Yadav and others?
Info Edge filed the FIR due to accusations of fraudulent activities involving the misuse of 4B Networks' funds and the failure to provide crucial financial details.
Who conducted the forensic audit of 4B Networks?
Deloitte was appointed to conduct the forensic audit of 4B Networks.
How much did Info Edge write off in its investment in 4B Networks?
Info Edge wrote off Rs 276 crore in its investment in 4B Networks.
What services does 4B Networks offer to real estate brokers and developers?
4B Networks offers services such as facilitating communication, conducting site visits, and assisting with home-loan-related services to real estate brokers and developers.
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