Info Edge Files FIR Against Rahul Yadav Over Alleged Fraud

Internet giant Info Edge’s complaint against Rahul Yadav over alleged fraud at Broker Network has been lodged as a first information report (FIR) by the Mumbai Police.

Yadav, the founder of Info Edge-backed 4B Networks which ran Broker Network, and others have been accused of fraudulent activities pertaining to the misuse of the funds. Yadav was formerly the cofounder of Housing.com.

“An FIR has been registered by the Bandra Police Station (Mumbai Police) on November 29, 2024 against Yadav, Devesh Singh, Pratik Choudhary, Sanjay Saini (and unnamed others) in connection with 4B Networks (an indirect subsidiary of the company), alleging inter alia commitment of certain fraudulent acts involving 4B Networks’ funds,” Info Edge said in an exchange filing on Saturday (November 30).

However, Info Edge has claimed that the FIR will not impact its business operations. The Sanjeev Bikhchandani-led company holds a 65% stake in the company.

Info Edge Vs Rahul Yadav & Broker Network

After the Housing.com fiasco and trying to start another startup after that, Rahul Yadav launched Broker Network in 2020, and despite his chequered history in running large companies, he managed to raise funds from Info Edge in 2021.

Starting from December 2021, Info Edge invested close to INR 280 Cr in Broker Network and acquired a majority stake in the company. However, the company’s operational challenges and allegations of misuse of funds began making the rounds among employees and broker groups in mid 2022. In August 2022, Yadav and Broker Network returned to Info Edge for more funds, but this time around there were questions from the investor about the operational challenges and lack of revenue growth.

Read Our Investigation Into Rahul Yadav & Broker Network

For instance, Broker Network’s peak employee count was close to 2,300 in July 2022, but it then suddenly dropped to under 1,600 in a month. Inc42’s original investigation into Rahul Yadav and Broker Network also revealed a tangle of corporate entities that were seemingly receiving funds from Yadav, even as Broker Network bled cash.

After writing off the Broker Network investment in December 2022, Info Edge initiated arbitration proceedings against Yadav and 4B Networks in July 2023. The company is alleged to have failed to provide financial information requested by Info Edge.

The investor appointed Deloitte as the forensic auditor to look into the affairs of 4B Network. 

Following this in October last year, Info Edge filed a complaint with the Economic Offences Wing (EOW) of Mumbai Police, which has now been registered as an FIR after the initial investigation by the agency.

Rahul Yadav’s Other EOW Case

Besides Yadav, the EOW complaint named 4B Networks Private Limited, and Chaudhary as well as Singh, Yadav’s wife Karishma Khokhar, and RY Advisory LLP, the partnership firm which was set up by the Broker Network founder.

In a separate case a Rajasthan-based vendor associated with Broker Network also filed an FIR against Rahul Yadav for alleged fraud and criminal breach of trust with the Economic Offences Wing (EOW) of Mumbai Police.

The FIR filed by Vikas Nowal, country head and cofounder of Interspace Communications, an advertising agency that was empanelled by Broker Network, alleged that the company has defrauded Interspace, which is owed INR 10 Cr by Broker Network  for the activity undertaken in 2022. The FIR claims that a total of 83 ad hoardings were installed by Interspace in Pune from April to August 2022.

Following this a lookout circular (LOC) was issued by the police against Yadav and his bank accounts were said to have been frozen, according to sources in the investigating agency.