 "FIR filed against 4B Network's Rahul Yadav, Sanjay Saini in fraud case")
Rahul Yadav, the founder of 4B Networks, is facing legal trouble again after the Mumbai Police's Economic Offences Wing (EOW) registered a first information report (FIR) against him and fellow senior executive Sanjay Saini on Saturday. The allegations pertain to fraud and breach of trust.
The FIR was filed by Vikas Om Prakas Nowal, the co-founder and Country Head of Noel Tata-backed Interspace Communications, an advertising agency. Nowal alleged that Yadav's company defrauded Interspace of Rs 10 crore.
The Rajasthan-based vendor, engaged by 4B Networks to conduct outdoor advertising campaigns in February 2022, carried out a series of 83 advertisement hoardings in Pune from April to August 2022. Nowal stated in the FIR, as seen by Business Standard, that his company completed services including installation, printing, hoarding display, and other advertising-related services. Noval's firm then sent invoices to 4B, and while some of these dues were cleared, others remained unpaid, according to the complainant.
The FIR has been filed against Yadav, Saini, and the company under sections 406 (criminal breach of trust), 409 (dishonest misappropriation), and 420 (cheating) of the Indian Penal Code. As of the present moment, there have been no arrests in connection with the case.
In addition to Interspace Communications, other businesses such as software development firm NeoSoft and home loans agent Finqy have reportedly not been paid their dues by 4B Networks, according to media sources.
Yadav, also the founder of Housing.com, established 4B as a proptech firm with a focus on the real estate sector. The company aimed to simplify property discovery by connecting four B's – buyers, brokers, builders, and banks.
This latest episode of payment defaults comes after Sanjeev Bikhchandani-led Info Edge, which holds a majority stake in 4B through its subsidiary Allcheckdeal India, initiated a forensic audit into 4B. This action followed the writing off of its Rs 288 crore ($35 million) investment in the broker network.
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An anonymous senior executive at Info Edge commented, "These cases (of payment lapses) are not surprising. The company owes a lot of money to many creditors. It just reaffirms the fact that investing in 4B was a mistake."
In June of this year, Info Edge, the parent company of Naukri.com, appointed Deloitte Touche Tohmatsu India LLP as 4B's forensic auditor after 4B repeatedly refused to share financial transaction data and information on related-party activities, despite multiple requests.
The situation escalated further in July when Info Edge took legal action by approaching the Delhi High Court. Both parties were then directed to appoint an arbitrator to mediate the growing dispute.