Info Edge on November 30, 2024 announced that it has filed FIR against Rahul Yadav of Housing.com, in an exchanged filing.
Info Edge’s filing of an FIR against key executives of 4B Networks marks the latest chapter in a prolonged dispute with the proptech startup. The conflict began in early 2023 when 4B Networks, led by Housing.com founder Rahul Yadav, failed to provide crucial financial information requested by Info Edge, which holds a 65 per cent stake in the company.
Why did Info Edge file FIR against Rahul Yadav
The current FIR, filed on November 29, 2024, accuses Yadav and other executives of fraudulent activities involving company funds. While Info Edge has assured that the FIR will not impact its business operations, the legal scrutiny adds another layer to the ongoing troubles at 4B Networks.
In June 2023, Info Edge initiated a forensic audit after repeated attempts to obtain details of financial transactions and dealings with related parties were ignored. The company had invested ₹280 crore in 4B Networks, including ₹275 crore in shares and ₹12 crore as debt. Despite this significant backing, 4B Networks reportedly defaulted on salary payments, vendor obligations, and demonstrated serious lapses in corporate governance.
The decision to audit followed Info Edge’s concerns about financial irregularities. Broker Network, operated by 4B Networks, was on the brink of collapse. As reported by Inc42, Info Edge eventually wrote off its ₹280 crore investment, signaling a lack of confidence in the firm’s financial health.
Rahul Yadav’s history
Rahul Yadav’s leadership has been a focal point in the unfolding drama. Known for his controversial stint at Housing.com, where he was ousted in 2015 following public disputes with investors, Yadav has had a tumultuous entrepreneurial journey. His ventures, including Housing.com and Intelligent Interfaces, often faced challenges related to governance and financial management.
At 4B Networks, Yadav attempted to secure additional funding by proposing a ₹50 crore investment from a Dubai-based property dealer. However, this offer came at a drastically reduced valuation—99 per cent lower than the previous funding round. This further fueled tensions with Info Edge, which had already flagged concerns about financial transparency and cash burn.
Speaking to analysts, Bikhchandani said, earlier this year, “We all make mistakes sometimes. Investors can also go wrong….I think we need to admit that 4B was a mistake. Companies go down but fraud is a different thing.”
#Mumbai #police #registers #Info #Edges #FIR #Housing.com #ECO #Rahul #Yadav #Networks #funds
