Info Edge Accuses Rahul Yadav, the Founder of 4B Networks, and Others of Fraud

Nitin Konde, Varun Bhardwaj

Dec 3, 2024 — 2 min read

Info Edge Files Fraud Allegations Against 4B Networks’ Rahul Yadav

Rahul Yadav, the founder of its portfolio firm 4B Networks, and others are the targets of a first information report (FIR) filed by online classified company Info Edge, the parent company of the jobs listing portal Naukri, due to allegations of fraudulent actions related to the misappropriation of the money. According to an exchange filing made by Info Edge on November 30, "a formal complaint has been filed by the Bandra Police Station (Mumbai Police) on November 29, 2024, against Yadav, who also co-founded Housing.com, Devesh Singh, Pratik Choudhary, Sanjay Saini (and unnamed others) in connection with 4B Networks (an indirect subsidiary of the company), alleging inter alia the commission of certain fraudulent acts involving 4B Networks' funds." Info Edge has promised that the FIR won't affect its commercial operations, nevertheless. In 2020, Yadav introduced 4B Networks.

Arbitration Proceedings Against 4B Networks

Since early 2021, the Sanjiv Bhikchandani-led Info Edge, which runs the Naukri.com employment portal, among other things, has invested a total of INR 288 crore in 4B Networks through its fully owned subsidiary ALLcheckdeals India in several tranches, holding a roughly 59% ownership.

After 4B Networks refused to give Info Edge the information it said it was contractually required to receive—including details and specifics of financial transactions, related party transactions, and information about operations and management—Info Edge launched a forensic examination last year. The Info Edge claimed at the time that although the startup was growing rapidly, it had chosen to write off the investment in accordance with "principles of conservatism" because of the high capital burn and the general funding climate. Info Edge complained to the Mumbai Police's Economic Offences Wing (EOW) in October of last year about Yadav's suspected INR 288 Cr in cheating. Yadav, Chaudhary, Singh, Yadav's wife Karishma Khokhar, and RY Advisory LLP, the partnership firm founded by the Broker Network founder, are also identified in the EOW complaint as 4B Networks Private Limited.

Info Edge’s Financial Report

In a message to investors, Info Edge revealed that it had lost INR 532 crore overall as a result of writing off its investment in 4B Networks. Before Info Edge had to write down its whole investment, the 4B Networks was valued at INR 719 crore.

One of the oldest internet-based businesses in India, Info Edge was founded in 1995 by Bikhchandani and works in a number of industries, including education (Shiksha), real estate (99acres), marriage (Jeevansathi), and recruitment (Naukri). Its portfolio includes unlisted edtech company Adda247, insurtech upstart PB Fintech, and listed heavyweights like foodtech giant Zomato. In the September quarter of the financial year 2024-25 (Q2 FY25), the company's net profit dropped 64.6% to INR 84.73 Cr from INR 239.74 Cr in the same quarter the previous year.