Trouble is never far away from Rahul Yadav, who had co-founded online real estate platform Housing.com, from which he was ousted, and proptech startup 4B Networks, whose investors are now sensing mischief in the company’s books. He has now reportedly been booked in a Rs 10 crore fraud case.

The Mumbai police’s Economic Offences Wing has filed an FIR and issued a lookout notice against him and another senior 4B Networks official, Sanjay Saini, for allegedly defrauding an advertising firm, a CNBC-TV18 report said.

The Rajasthan-based advertising firm said Yadav’s company engaged in “deceptive practices” and did not settle dues for agreed-upon payments, resulting in losses for the ad firm.

The duo is facing charges under sections 420 (related to cheating) and 406 (related to breach of trust) of the Indian Penal Code.

Not new to controversy: The development comes at a time when 4B Networks is facing a forensic audit initiated by investor Info Edge for not disclosing details of financial transactions and related-party activities. However, at the heart of the chaos at 4B Networks lies a flawed business model, sham prospective buyers and high payouts to brokers (we have written about how Yadav bungled 4B Networks here and here.)

Info Edge, which owns an over 59% stake in the company through its subsidiary Allcheckdeals India, had written off its Rs 276 crore equity investment in 4B Networks during the December 2022 quarter citing “excessive cash burn, prevailing liquidity issues and significant uncertainty towards funding options”.

According to a Moneycontrol report, Info Edge had given 4B Networks an additional Rs 12 crore in debt financing for payments to employees and vendors, which it reportedly did not carry out. With dues piling high and several employees unpaid since last year, reports said Yadav continued to splurge on luxuries while the company battled a cash crunch.

Info Edge has initiated arbitration proceedings against Yadav, and cofounder Sanjeev Bikhchandani told analysts last week that backing 4B Networks was a mistake.

Yadav’s claim to fame was the SoftBank-backed startup Housing.com. In 2015, he was fired from Housing.com by the company’s board for behaviour that was “not befitting of a chief executive officer and detrimental to the company”. His relationship was so tumultuous that during his ouster, lawyers for SoftBank had even called for help from cops.