The firm that Rahul Yadav and his partners founded is the subject of Info Edge's financial irregularities prosecution

 The firm that Rahul Yadav and his partners founded is the subject of Info Edge's financial irregularities prosecution

Info Edge claims in a Mumbai Police complaint that Yadav has transacted with people, businesses, and suppliers connected to him on a number of high-value occasions.

The company's founder, Rahul Yadav, has been accused of engaging in "suspicious transactions" with 4B Realtech Pvt Ltd, a business purportedly founded by an acquaintance of Yadav, by Info Edge, the company's major shareholder.

Info Edge claimed in a complaint filed on August 22 with the Mumbai Police's Economic Offences Wing (EOW) that 4B Networks had given 4B Realtech a loan of Rs. 10 crore. It has been claimed that Yadav's close allies received a further transfer of this money.

"The complainant has cause to suspect that 4B Realtech moved a significant portion of the debt to Aceuser, a business where Yadav's wife has a controlling stake. According to the complaint, a copy of which Moneycontrol has seen, "The respondent company (Info Edge) believes that such payments were made with a view to transporting funds from 4B Networks."

Since the beginning of 2021, Info Edge, managed by Sanjiv Bhikchandani, has made many tranched investments totaling Rs 288 crore in 4B Networks. When it released the third quarter results of FY23 in February of this year, it wiped down its entire investment.

Through the use of a whistleblower, Moneycontrol was able to get copies of 4B Realtech account statements from ICICI Bank and Axis Bank. According to the Info Edge lawsuit, these account records for the second part of 2022 and 2023 demonstrate that 4B Realtech, which was founded in July 2022, has received deposits totaling up to Rs 10 crore since last year. The significant deposits were mostly from 4B Networks, even though they were from many accounts.

According to the Info Edge lawsuit, the money that was placed into these accounts was taken out right away or moved to organizations and people who were linked to Yadav. Among them is a former Yadav coworker from 4B Networks. According to the allegation, Yadav's wife Karishma Singh is a primary stakeholder of Aceuser, a Noida-based firm, which is another significant benefactor. Singh is not now a director of Aceuser, according the private corporate database portal Tofler.

According to the EOW lawsuit, 4B Networks lent 4B Realtech Rs 10 crore between December 2022 and January 2023, with some of the funds going to Aceuser and the remainder to people associated with Yadav.

In response to questions from Moneycontrol, Info Edge and Rahul Yadav both mentioned an ongoing arbitration within the parties at the Delhi High Court.

Additional transactions scanned

Info Edge has reported further questionable transactions involving 4B Networks, Yadav, and other parties in addition to the 4B Networks – 4B Realtech deal. It said that one such transaction benefited RY Advisory, a business where Yadav served as both a director and a 50% shareholder.

Through the aforementioned unlawful and convoluted transactions, "Accused number 1 (Yadav) deceived the party complaining company (Allcheckdeals India Pvt Ltd, an entirely owned division of Info Edge) by making inaccurate and incorrect representations alongside induced it to invest and lend substantial sums aggregating to Rs 288 crore... removed the money that had been invested for personal benefit or use, leading the complainant to suffer unlawful loss, according to Info Edge's EOW complaint.

A close associate of Yadav denied these claims. He informed Moneycontrol that Yadav had severed relationships with organizations like Aceuser and RY Advisory, which were established several years ago. Tofler, a private corporate information web, still identifies Yadav's position as RY Advisory's director. According to one source, the idea was to move staff from 4B Networks to 4B Realtech in order to lower the latter's overhead. The funds were moved to cover both the staff members' wages and vendor obligations.

"4B Realtech was founded with the purpose of financing invoices using a license for non-banking financial companies. After then, the plan was altered, and it stopped operating until Info Edge gave the go-ahead for it to be managed as a distinct company in order to hire 4B Networks staff members, this source stated on the condition of anonymity.

He said that even though Info Edge had initially promised to assist 4B Networks for four years, they stopped more money to the firm after last year's financial freeze, which caused all of the plans to fall through.

According to this individual, 4B Realtech has paid suppliers for their services in whole and on time.  He said that the claims made in the lawsuit are untrue since neither Aceuser nor RY Advisory, the two businesses mentioned in it, collaborated with 4B Networks or received funds directly from Info Edge. The individual did not, however, provide an explanation for why the wages of the moved workers were not paid with these cash.

According to a source with knowledge of the matter, Info Edge was first made aware of 4B Realtech and the money that was moved to it when the auditor for 4B Networks, Deloitte, saw some activities. When Info Edge questioned Yadav about 4B Realtech, he said that all 4B Networks staff members may be moved to this new company (4B Realtech), which was in charge of 4B Networks' home loans division. Yadav said that this will enable 4B Networks to continue operating in light of its pitiful income.

Info Edge is still hurting.

In a message to investors at the quarterly results release on November 7, Info Edge, which among other things runs the Naukri.com jobs site, revealed that writing down its investment in 4B Networks resulted in a total loss of Rs 532 crore.

Although Info Edge invested Rs 288 crore in the firm, the remaining amount represents the theoretical loss resulting from a greater value than the startup had previously been able to obtain. Prior to Info Edge being forced to write down the whole amount of money it invested via its wholly-owned subsidiary Allcheckdeals India, the company was valued at Rs 719 crore.

Info Edge launched a forensic audit after 4B Networks allegedly neglected to provide it information it was contractually required to get on operations and management, financial transaction details and particulars, and related party transactions.

After Info Edge filed a petition with the Delhi High judge in July, the judge ordered the two businesses to enter arbitration. In August, Info Edge submitted a complaint to the EOW.