NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT WITH REDIFECOM DEFENDANTS, MOTION FOR ATTORNEYS' FEES AND SETTLEMENT FAIRNESS HEARING

NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT WITH REDIFECOM DEFENDANTS, MOTION FOR ATTORNEYS' FEES AND SETTLEMENT FAIRNESS HEARING

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK IN RE INITIAL PUBLIC OFFERING 21 MC 92 (SAS) SECURITIES LITIGATION This document relates to: IN RE REDIFF.COM INDIA LTD. 01 CV 3020 (SAS) SECURITIES LITIGATION NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT WITH REDIFECOM DEFENDANTS, MOTION FOR ATTORNEYS' FEES AND SETTLEMENT FAIRNESS HEARING IF YOU BOUGHT AMERICAN DEPOSITARY SHARES ("ADSs") OF REDIFF.COM INDIA LTD. DURING THE TIME PERIOD BETWEEN JUNE 14, 2000 THROUGH APRIL 4, 2001, INCLUSIVE, YOU COULD GET A PAYMENT FROM A CLASS ACTION SETTLEMENT.

A federal court authorized this notice.

This is not a solicitation from a lawyer. A proposed settlement of part of this litigation (the "Settlement") will provide $2,500,000 for the benefit of investors who bought American Depositary Shares ("ADSs") of Rediff.com India Ltd. ("Rediff') during the time period between June 14, 2000 through April 4, 2001, inclusive (the "Class Period"). This lawsuit involves two general types of Claims: "Non-IPO Causes of Action," which involve allegations of securities fraud claims based upon alleged misrepresentations concerning the business of Rediff; and "IPO Causes of Action" which involve an alleged scheme to defraud the investing public characterized by tie-in agreements, undisclosed compensation and analyst conflicts, for the purpose of fraudulently driving up the price of stock in hundreds of companies in the immediate aftermarket of their IPOs.

The proposed Settlement resolves ALL the claims against certain Defendants, referred to as the "Settling Defendants" or "Rediff Defendants" (consisting of Rediff and its officers and directors, Ajit Balakrishnan, Nitin Gupta, Rajiv Warrier, and Richard Li). The proposed Settlement would also dismiss, with prejudice, and provide a covenant not to sue on the Non-IPO Causes of Action as against the "Underwriter Defendants" (Goldman Sachs (Asia) L.L.C., Goldman Sachs & Co., Robert Fleming, Inc., Credit Suisse First Boston Corp.), but the proposed Settlement does NOT release or dismiss the IPO Causes of Action as against the Underwriter Defendants.

Your legal rights are affected whether you act, or don't act. Read this notice carefully.

YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT SUBMIT A CLAIM FORM The only way to get a payment. BY SEPTEMBER 7, 2007 EXCLUDE YOURSELF BY Get no payment. This is the only option that allows you to ever be part of JUNE 29, 2007 any other lawsuit against the Settling Defendants and the other Released Parties about the Resolved Claims. OBJECT BY JUNE 15, 2007 Write to the Court about why you do not like the Settlement. GO TO A HEARING ON Ask to speak in Court about the Settlement.

JULY 12, 2007 DO NOTHING Get no payment. Give up rights. These rights and options - and the deadlines to exercise them - are explained in this Notice. The Court in charge of this case still has to decide whether to approve the Settlement. Payments will be made if the Court approves the Settlement and after appeals are resolved. Please be patient.

SUMMARY OF NOTICE A. Statement of Plaintiff Recovery Pursuant to the Settlement described herein, a Settlement Fund consisting of $2,500,000 in cash, plus interest, has been established. Plaintiffs estimate that there were approximately 32.1 million Rediff ADSs traded during the Class Period which may have been damaged. Plaintiffs estimate that the average recovery for each allegedly damaged Rediff ADS under the Settlement is $0.081 before deduction of Court-awarded attorneys' fees and expenses. A Class Member's actual recovery will be a proportion of the Net Settlement Fund determined by that claimant's Recognized Claim as compared to the total Recognized Claims of all Class Members who submit acceptable Proofs of Claim.

Depending on the number of claims submitted, when during the Class Period a Class Member purchased their Rediff ADSs, the purchase price paid, and whether those ADSs were held at the end of the Class Period or sold during the Class Period and, if sold, when they were sold and the amount received, an individual Class Member may receive more or less than this average amount. See Understanding Your Payment beginning on page 14 for more information on your Recognized Claim. B. Statement of Potential Outcome of Case The parties disagree on both liability and damages and do not agree on the average amount of damages per ADS that would be recoverable if Plaintiffs were to have prevailed on each claim alleged.

Under the relevant securities laws, a class member's recoverable damages are limited to losses that can be attributed to the alleged violations. Losses which resulted from factors other than the alleged violations or misrepresentations, such as from general business downturns, are not recoverable. Defendants have asserted that the decline in the price of Rediff's ADSs from a high of $19.31 within days of the June 14, 2000 Initial Public Offering, to $14.38 the next month, and to $3.58 by January 2001, all of which declines occurred before, and without, any ascertainable "corrective" disclosure, resulted from factors other than the alleged violations or misrepresentations and ommissions.

Defendants further assert that the decline from $3.58 upon the release of allegedly "corrective" information, to as low as $2.00 per ADS, was quickly reversed as the price of Rediff's ADSs rose again to $3.25 within days thereafter. Defendants' arguments suggest that at most the damages 1 An allegedly damaged ADS might have been traded more than once during the Class Period, and the indicated average recovery would be the total for all purchasers of that ADS.

might be $0.33 per ADS ($3.58 - $3.25), so that the recovery of $0.08 per ADS would represent approximately 24% of the maximum damages, in the Settling Defendants' view. The Settling Defendants would further argue that even the decline from $3.58 to $3.25 was attributable to other non-actionable reasons that were announced contemporaneously with the allegedly corrective information, and that the $0.33 estimate greatly overstates recoverable damages. In addition, all Defendants strongly deny that they are liable so that damages are irrelevant and that there would be no recovery after trial.

Plaintiffs' Counsel have estimated that the Class has claims against all Defendants for alleged damages totaling approximately $29 million in this case. Plaintiffs' Counsel contend that the Non-Settling Underwriter Defendants bear a greater responsibility for the damages than the Settling Defendants. While Plaintiffs might seek to show that the entire difference between the offering price and a Class Member's sale price is recoverable under the Securities Act, the Defendants would attempt to show that other factors unrelated to the alleged misstatements caused such losses. The Settling Defendants deny that they are liable to the Plaintiffs or the Class and deny that Plaintiffs or the Class have suffered any damages.

Plaintiffs' Counsel recognized that in the absence of a settlement with the Settling Defendants there were risks that Plaintiffs and the Class could have recovered nothing or substantially less than the amount of the Settlement being obtained from the Settling Defendants.

C. Statement of Attorneys' Fees and Costs Sought Plaintiffs' Counsel are moving the Court to award attorneys' fees not to exceed one-third (33%%) of the Gross Settlement Fund, and for reimbursement of expenses incurred in connection with the prosecution of this Action in the approximate amount of $110,000. The requested fees and expenses would amount to an average of 2.90 per allegedly damaged ADS in total for fees and expenses. Plaintiffs' Counsel have expended considerable time and effort in the prosecution of this litigation through the successful opposition to the Defendants' motions to dismiss and in discovery.

Plaintiffs' Counsel have worked on a contingent-fee basis, and have advanced the expenses of the litigation, in the expectation that if they were successful in obtaining a recovery for the Class they would be paid from such recovery. In this type of litigation it is customary for counsel to be awarded a percentage of the common fund recovery as their attorneys' fees. D. Further Information Further information regarding the Action and this Notice may be obtained by contacting Plaintiffs' Counsel: Victor E. Stewart, Esq. or Ian T. Stoll, Esq., Lovell Stewart Halebian LLP, 500 Fifth Avenue, New York, NY 10110, Telephone: (212) 608-1900.

E. Reasons for the Settlement The Plaintiffs' principal reason for the Settlement is the benefit to be provided to the Class now. This benefit must be compared to the risk that no recovery might be achieved after a contested trial and likely appeals, possibly years into the future. For the Settling Defendants, who deny all allegations of wrongdoing or liability whatsoever, the principal reason for the Settlement is to eliminate the expense, risks, and uncertainty of continuing to litigate this action. [END OF COVER PAGE]

TABLE OF CONTENTS Page SUMMARY OF NOTICE ___ 2
A.

Statement of Plaintiff Recovery ___ 2
B. Statement of Potential Outcome of Case ___ 2
C. Statement of Attorneys ' Fees and Costs Sought ___ 3
D. Further Information ___ 3
E. Reasons for the Settlement ___ 3
BASIC INFORMATION ___ 5
1. Why did I get this Notice package ___ 5
2. What is this lawsuit about ___ 5
3. Tell me more about this litigation ___ 6
4. Why is this a class action ___ 7
5. Why is there a Settlement ___ 7
6. Tell me more about the background to the Settlement ___ 7
7. Tell me more as to the Non-Settling Defendants' partial dismissal ___ 8
WHO IS IN THE SETTLEMENT ___ 8
8.

How do I know if I am part of the Settlement ___ 8
9. Are there exceptions to being included ___ 8
10. What if I am still not sure if I am included ___ 9
THE SETTLEMENT BENEFITS - WHAT YOU GET ___ 9
11. What benefits does the Settlement provide ___ 9
12. How much will my payment be ___ 9
HOW YOU GET A PAYMENT - SUBMITTING A PROOF OF CLAIM FORM ___ 9
13. How can I get a payment ___ 9
14. When would I get my payment ___ 9
15. What am I giving up to get a payment or stay in the Class ___ 10
EXCLUDING YOURSELF FROM THE SETTLEMENT ___ 10
16. How do I get out of the proposed Settlement ___ 11
17.

If I do not exclude myself, can I sue the Settling Defendants and the other Released Parties for the same thing later ___ 11
18. If I exclude myself, can I get money from the proposed Settlement ___ 11
THE LAWYERS REPRESENTING YOU ___ 11
19. Do I have a lawyer in this case ___ 11
20. How will the lawyers be paid ___ 11
OBJECTING TO THE SETTLEMENT ___ 12
21. How do I tell the Court that I do not like the proposed Settlement ___ 12
22. What is the difference between objecting and excluding ___ 13
THE COURT'S SETTLEMENT FAIRNESS HEARING ___ 13
23. When and where will the Court decide whether to approve the proposed Settlement ___ 13
24.

Do I have to come to the Settlement Fairness Hearing ___ 13
25. May I speak at the Settlement Fairness Hearing ___ 13
IF YOU DO NOTHING ___ 14
26. What happens if I do nothing at all ___ 14
GETTING MORE INFORMATION ___ 14
27. Are there more details about the proposed Settlement ___ 14
28. How do I get more information ___ 14
UNDERSTANDING YOUR PAYMENT ___ 14
29. How will my losses be calculated? How does the Claims Administrator handle the situation when the total claims exceed the money in the Settlement Fund ___ 14
30. How do I calculate what my payment might be ___ 17
SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES ___ 20
4

BASIC INFORMATION 1. Why did I get this Notice package? You or someone in your family may have purchased American Depositary Shares ("ADSs") of Rediff.com India Ltd ("Rediff") during the time period between June 14, 2000 through April 4, 2001, inclusive (the "Class Period"). The Court directed that this Notice be sent to all Class Members because they have a right to know about the proposed Settlement of this class action lawsuit, and about all of their options, before the Court decides whether to approve the Settlement. If the Court approves the Settlement and after objections and appeals are resolved, a claims administrator appointed by the Court will make the payments that the Settlement allows.

You will be informed of the progress of the Settlement.

This package explains the lawsuit, the Settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them. The Court in charge of the case is the United States District Court for the Southern District of New York, and the case is known as In re Rediffcom India Ltd. Securities Litigation, Case No. 01-CV-3020 (SAS). This case is also part of a group of cases known as In re Initial Public Offering Securities Litigation, 21 MC 92 (SAS). U.S. District Judge Shira A. Scheindlin is presiding over both lawsuits. The people who sued are called "Plaintiffs." And the persons and entities they sued are the "Defendants." For purposes of this Notice, Rediff, Ajit Balakrishnan, Nitin Gupta, Rajiv Warner, and Richard Li are known as the "Settling Defendants." The remaining Defendants are Goldman Sachs (Asia) L.L.C., Goldman Sachs & Co., Robert Fleming, Inc., Credit Suisse First Boston Corp.

and are known as the "Non-Settling Defendants" or the "Underwriter Defendants." 2. What is this lawsuit about? Generally, the Plaintiffs' Consolidated Amended Securities Class Action Complaint (the "Complaint") sets forth ten alleged claims of violation of the federal securities laws.

The First through Sixth Claims are referred to as the "IPO Causes of Action" and relate to alleged IPO "laddering," undisclosed compensation, tie-in agreements and analyst conflicts. The Seventh through Tenth Claims are referred to as the "Non-IPO Causes of Action" and relate to alleged misrepresentations and omissions regarding the business of Rediff in Rediff's Registration Statement and subsequent public filings. See detailed discussion below. The Non-IPO Causes of Action, and the alleged participation by the Settling Defendants in the IPO Causes of Action, are the subject of the Settlement.

The Settling Defendants deny they did anything wrong. The Court did not decide which side was right. But both the Plaintiffs and the Settling Defendants agreed to the Settlement to resolve the case and get benefits to investors. The two sides disagree on whether and how much money could have been won if the investors had won at a trial. The Non-Settling Defendants are not a party to this Settlement. Nevertheless, as part of the Settlement, the Non-IPO Causes of Action are also being dismissed as against the Non-Settling Defendants, with prejudice, and Class Members shall be deemed by the Judgment in this Action to covenant not to sue the Underwriter Defendants with respect to the Non-IPO Causes of Action, so that the Settling Defendants do not remain liable to the Non-Settling Defendants for contractual indemnity claims that the Non-Settling Defendants may assert against the Settling Defendants.

The IPO Causes of Action are not being dismissed or released as against the Non-Settling Defendants and will continue to be prosecuted as part of the consolidated action in In Re Initial Public Offering Securities Litigation 21 MC 92 (SAS) (the "IPO Securities Litigation"). 3. Tell me more about this litigation? Beginning on or about April 4, 2001, several lawsuits - Khanna v. Rediff com India Ltd., et al., No. 01 Civ. 3020; Steinberg v. Rediff com India Ltd., et al., No. 01 Civ. 3471; Bhasin v. Rediff com India Ltd., et al., No. 01 Civ. 3593; Karakunnel, et al. v. Rediff com India Ltd., et al., No.

01 Civ. 3814; and Shives v. Bank of America Securities LLC, et al., No. 01 Civ. 4956 - were filed in the United States District Court for the Southern District of New York.

The first four cases alleged substantially identical misrepresentations and omissions in Rediff's Registration Statement and a Prospectus dated June 13, 2000 . The Shives case did not allege any misrepresentations or omissions in Rediff's offering documents but asserted claims similar to those in the IPO Securities Litigation. The first four cases were initially assigned to the Honorable Richard Owen. In June of 2001, Drs. Khanna and Desai moved to be appointed lead plaintiff. Without ruling on the motion, Judge Owen transferred the cases to Judge Scheindlin for coordination with the IPO Securities Litigation.

In September of 2001 , Judge Scheindlin consolidated all five cases into the Khanna lawsuit and ordered that the other four cases be administratively closed . In August 2003, Plaintiffs sought leave to file a consolidated amended complaint. On November 20, 2003, Judge Scheindlin appointed Drs. Khanna and Desai Lead Plaintiffs and gave them permission to file an amended complaint.

The Plaintiffs ' Complaint sets forth ten claims alleging that: i) the Rediff Defendants and the Underwriter Defendants violated section 11 of the Securities Act of 1933 (the "Securities Act") with respect to alleged IPO "laddering" and Undisclosed Compensation in connection with Rediff's IPO (First Claim); ii) the Rediff Defendants violated section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), as well as Rule lob-5 promulgated thereunder, with respect to materially false and misleading statements and omissions of material fact related to the same alleged misconduct (Fifth Claim); iii) the Individual Defendants violated section 15 of the Securities Act and section 20(a) of the Exchange Act, respectively, with respect to the same alleged misconduct (Second Claim and Sixth Claim); iv) the Underwriter Defendants violated section 10(b) of the Exchange Act, as well as Rule lob-5 promulgated thereunder, with respect to deceptive and manipulative practices relating to alleged IPO "laddering" and Undisclosed Compensation and materially false and misleading statements and omissions of material fact relating to the same alleged misconduct (Third Claim and Fourth Claim); v) the Rediff Defendants and the Underwriter Defendants violated section 11 of the Securities Act as a result of allegedly false and misleading statements and omissions contained in the Registration Statement with respect to the business of Rediff (Seventh Claim); vi) the Individual Defendants violated section 15 of the Securities Act with respect to the same alleged misconduct (Eighth Claim); vii) the Rediff Defendants violated section 10(b) and Rule lob-5 with respect to allegedly false and misleading statements and omissions made after the IPO (Ninth Claim); and viii) the Individual Defendants violated section 20(a) of the Exchange Act with respect to such statements and omissions (Tenth Claim).

The Non-IPO Causes of Action, and the alleged participation by the Rediff Defendants in the IPO Causes of Action, are the subject of the Settlement. Lovell Stewart Halebian LLP was appointed co-lead counsel for Plaintiffs ' Non-IPO Causes of Action. Six firms were appointed as an executive committee of co-lead counsel for Plaintiffs ' IPO Causes of Action. "Plaintiffs ' Counsel" means the law firm of Lovell Stewart Halebian LLP for the purposes of the Non-IPO Causes of Action, and the six-firm IPO Executive Committee for the purposes of the IPO Causes of Action.

Judge Scheindlin, on October 15, 2004, denied motions to dismiss by all the Defendants. She held that the officers and directors were not prejudiced by purported untimely service of process. She further found 6

sufficiently pleaded the allegations in the Complaint concerning the IPO Causes of Action and, with respect to the Non-IPO Causes of Action, found sufficiently pleaded allegations regarding (a) the misrepresentation of the educational background of one of Rediff's directors, (b) misrepresentation of the expiration of advertising contracts and (c) misrepresentations regarding Rediff's email system.

She also found that the Complaint sufficiently pleaded the legal requirements of scienter and loss causation.

Since that date, Plaintiffs and the Settling Defendants vigorously sought discovery from each other and third parties. They reviewed hundreds of thousands of pages of documents and have conducted eight depositions. The Plaintiffs moved for class certification and the Defendants have vehemently opposed. 4. Why is this a class action? In a class action, one or more people called Class Representatives (in this case, Drs. Suresh Khanna and Avinash Desai), sue on behalf of people who have similar claims. All these people are a Class or Class Members. One court resolves the issues for all Class Members, except for those who exclude themselves from the Class.

Judge Scheindlin is in charge of this class action.

5. Why is there a Settlement? The Court did not decide in favor of Plaintiffs or the Settling Defendants. The Plaintiffs think that if they won a trial and every issue was decided in their favor, they might have claimed as much as $29 million. The Defendants think the Plaintiffs would not have won anything from a trial. But there was no trial. Instead, both sides agreed to a Settlement. Although the Court denied Defendants' Motion to Dismiss the Complaint, the Court did not finally decide in favor of Plaintiffs or Defendants. Instead, both sides agreed to a Settlement. That way, they avoid the risks and cost of a trial, and the people affected will get compensation.

The Class Representatives and their attorneys think the Settlement is best for all Class Members. 6. Tell me more about the background to the Settlement?

Plaintiffs' Counsel conducted an investigation relating to the events and transactions alleged in the Complaint. Plaintiffs' Counsel analyzed evidence and researched the applicable law with respect to the claims against the Settling Defendants and their potential defenses. Plaintiffs' Counsel and the Settling Defendants conducted discussions and arms-length negotiations with the assistance of the Court's appointed mediator, United States Magistrate Judge Henry Pitman. Plaintiffs' Counsel pursued a settlement with a view to achieving the best relief possible consistent with the interest of the Class.

The decision by Plaintiffs' Counsel to enter into the Settlement was made with knowledge of the facts and circumstances underlying Plaintiffs' claims and the strengths and weaknesses of those claims. Plaintiffs' Counsel took into account the substantial expense and length of time necessary to further prosecute the lawsuit through a class motion, discovery, and (if summary judgment were denied) trial, post-trial motions, and likely appeals. Although Plaintiffs' continuing claims against the Non-Settling Defendants make it inadvisable to detail all of the potential risks of continued prosecution, Plaintiffs' Counsel considered the risk and uncertainty of ultimately prevailing at trial against the Settling Defendants in light of various factors.

The discovery risks included: (a) the difficulty of obtaining discovery in India, (b) the complexity of obtaining evidence from entities abroad, and (c) diminishing memories with the passage of time. The legal risks included the defense that some of the challenged statements and omissions were forward-looking, or otherwise subject to a legal "safe harbor" or "truth-on-the-market" defense, and other affirmative defenses. The Settlement provides a substantial cash benefit and avoids the risks that the Settling Defendants would prevail at trial. It should be noted that the Plaintiffs and the Settling Defendants conducted multiple mediation sessions and numerous telephone conferences with Magistrate Pitman.

Plaintiffs' Counsel conducted discovery, reviewing hundreds of thousands of pages of documents, interviewing numerous potential witnesses and deposing the Settling Defendants from Mumbai, India (on two occasions), from Hong Kong and from New York.

Based on all of the foregoing, Plaintiffs' Counsel, who have extensive experience in complex class litigation and securities matters, believe that the Settlement provides concrete benefits now versus a highly uncertain prospect of any monies from the Settling Defendants after several more years of class litigation, motions, full discovery and possibly trial and appeals. Taking into consideration the significant uncertainties in predicting the outcome of this complex litigation, Plaintiffs' Counsel believes that the Settlement confers substantial and concrete benefits upon the Class. Plaintiffs' Counsel concluded that the proposed Settlement is fair, reasonable and adequate to the Plaintiffs and the Class, and it is in the best interest of Plaintiffs and the Class to enter into the Settlement.

The Settling Defendants deny all wrongdoing or liability. Thus, the Settlement is not evidence, admission or concession of any fault or liability or damages by the Settling Defendants. The Settling Defendants do not concede any inadequacy in any defense they asserted or intended to assert. The Settling Defendants, while continuing to deny all allegations of wrongdoing or liability whatsoever, desired to settle and terminate all existing and potential claims against them, without in any way acknowledging any fault or liability. The Court has not determined the merits of the Plaintiffs' claims or the Settling Defendants defenses.

This Notice should not be construed to imply that there has been or would be any finding of violation of the law, or that there would be any possible recovery if the lawsuit were not settled. 7. Tell me more as to the Non-Settling Defendants' partial dismissal? An integral part of the Settlement is the extinguishment of all of the Non-IPO Causes of Action, even against the Non-Settling Defendants. The reason for dismissing the Non-IPO Causes of Action as against the Non-Settling Defendants is that Rediff had entered into an indemnity agreement with the Non-Settling Defendants as part of its IPO underwriting.

This agreement required Rediff, in certain instances, to pay any damages assessed against the Non-Settling Defendants. Thus, in order for Rediff to obtain the peace it seeks by agreeing to the Settlement, it has to be freed of the potential indemnification claims. The Judgment dismissing the Non-IPO Causes of Action as against the Underwriter Defendants will also contain a "covenant not to sue" prohibiting all Class Members from suing the Underwriter Defendants with respect to the Non-IPO Causes of Action.

WHO IS IN THE SETTLEMENT? To see if you will get money from this Settlement, you first have to decide if you are a Class Member. 8. How do I know if I am part of the Settlement? Judge Scheindlin, in her Preliminary Approval Order In Connection With Settlement Proceedings, dated March 30, 2007, directed, for the purposes of the proposed Settlement, that everyone who fits this description is a Class Member: "all persons and entities who purchased the ADSs ofRediffcom India Ltd. during the time period between June 14, 2000 through April 4, 2001, inclusive." 9. Are there exceptions to being included?

You are not a Class Member if you are: (a) a Settling Defendant; (b) an Underwriter Defendant; (c) any of the officers and directors of Rediff and its subsidiaries and affiliates; (d) a member of the immediate family (parents, spouses, siblings, and children) of any Individual Defendant; (e) an entity in which any Defendant has a controlling interest; or (f) the legal representatives, heirs, successors-in-interest, or assigns of any excluded party. Also excluded from the Class are any putative Class Members who exclude themselves by submitting a timely request for exclusion in accordance with the requirements set forth in this Notice.

If one of your mutual funds owns Rediff ADSs, that alone does not make you a Class Member. You are a Class Member only if you purchased Rediff ADSs individually. Contact your broker to see if you have or held Rediff ADSs. If you sold Rediff ADSs during the Class Period, that alone does not make you a Class Member. You are a Class Member only if you bought Rediff ADSs during the Class Period. 10. What if I am still not sure if I am included? If you are still not sure whether you are included, you can ask for free help by contacting the Claims Administrator by mail at: Rediff.com India Securities Litigation; c/o Berdon Claims Administration LLC; P.O.

Box 9014; Jericho, NY 11753-8914; by toll-free phone at: (800) 766-3330; by fax at: (516) 931-0810; or by visiting the website at: www.berdonclaims.com . Alternatively, you can fill out and return the claim form described in Question 13 to see if you qualify.

THE SETTLEMENT BENEFITS - WHAT YOU GET 11. What benefits does the Settlement provide? In exchange for the Settlement and dismissal of the Action as against the Settling Defendants and the dismissal of the Non-IPO Causes of Action as against the Non-Settling Defendants, the Settling Defendants have agreed to create a $2,500,000 fund to be divided among all Class Members who submit a valid claim form. 12. How much will my payment be? Your share of the fund will depend on the total Recognized Claims represented by the valid Proof of Claim forms that Class Members send in, how many Rediff ADSs you bought, how much you paid for them, and when you bought and whether or when you sold them, and, if so, for how much you sold them.

You can calculate your Recognized Claim in accordance with the formula shown below in the Plan of Allocation. It is unlikely that you will get a payment for all of your Recognized Claim. After all Class Members have sent in their Proof of Claim forms, the payment you get will be a part of the Net Settlement Fund equal to your Recognized Claim divided by the total of everyone's Recognized Claims. See Understanding Your Payment beginning on page 14 for more information on your Recognized Claim. HOW YOU GET A PAYMENT - SUBMITTING A PROOF OF CLAIM FORM 13. How can I get a payment?

To qualify for a payment, you must send in a Proof of Claim form. The Proof of Claim form is included with this Notice. You can also download a Proof of Claim form from the Claims Administrator's website at www.berdonclaims.com . Read the instructions carefully, fill out the Proof of Claim form, include all the documents the form asks for, sign it, and mail it postmarked no later than September 7, 2007. 14. When would I get my payment? The Court will hold a Settlement Fairness Hearing on July 12, 2007, to decide whether to approve the Settlement. If the Court approves the Settlement, there may be appeals after that.

It is always uncertain whether such appeals can be resolved, and resolving them can take time, perhaps more than a year. It also takes time for all the Proofs of Claim to be processed. Please be patient.

15. What am I giving up to get a payment or stay in the Class? Unless you exclude yourself, you are staying in the Class, and that means that, upon the "Effective Date," you will release all "Resolved Claims" (as defined below) against the "Released Parties" (as defined below). In addition, all your Rediff Non-IPO Claims against the Underwriter Defendants will be dismissed with prejudice and you will be prohibited by a covenant not to sue from suing the Underwriter Defendants with respect to the Non-IPO Causes of Action.

Resolved Claims" means any and all claims, debts, demands, rights or causes of action or liabilities whatsoever (including, but not limited to, any claims for damages, interest, attorneys' fees, expert or consulting fees, and any other costs, expenses or liability whatsoever), whether based on federal, state, local, statutory or common law or any other law, rule or regulation, whether fixed or contingent, accrued or un-accrued, liquidated or unliquidated, at law or in equity, matured or unmatured, whether class or individual in nature, including both known claims and Unknown Claims (as defined below), (a) that have been asserted in this Action by the Class Members or any of them against any of the Released Parties, or (b) that could have been asserted in any forum by the Class Members or any of them against any of the Released Parties which arise out of or are based upon the allegations, transactions, facts, matters or occurrences, representations or omissions involved, set forth, or referred to in the Complaint and which relate in any way to the purchase of Rediff ADSs during the Class Period; provided, however, that "Resolved Claims" does not mean or include the IPO Causes of Action against the Underwriter Defendants.

The Underwriter Defendants are not being released from the IPO Causes of Action under this Stipulation. The Non-IPO Causes of Action are being dismissed as against the Underwriter Defendants as provided for in the Stipulation. The Parties have agreed to release the Settling Defendants from the Fifth and Sixth Causes of Action in their entirety. "Released Parties" means, collectively, the Rediff Released Parties and the Insurer Released Parties as defined below: a. The Rediff Released Parties means the Settling Defendants, as well as their past, present, or future parents, subsidiaries, divisions, affiliates, directors, employees, acquirers, partners, joint venturers, investors, agents, accountants, auditors, attorneys, representatives, heirs, executors, administrators, predecessors, successors and/or assigns.

The Underwriter Defendants are not included among the Rediff Released Parties. b. The Insurer Released Parties means the Insurers, as well as their past, present, or future parents, subsidiaries, divisions, affiliates, directors, employees, acquirers, partners, joint venturers, investors, agents, accountants, auditors, attorneys, representatives, heirs, executors, administrators, predecessors, successors and/or assigns. The Underwriter Defendants are not included among the Insurer Released Parties. The "Effective Date" will occur when an Order entered by the Court approving the Settlement becomes final and not subject to appeal.

If you remain a member of the Class, all of the Court's orders will apply to you and legally bind you. EXCLUDING YOURSELF FROM THE SETTLEMENT If you do not want a payment from this Settlement, but you want to keep any right you may have to sue or continue to sue the Settling Defendants and the other Released Parties on your own about the Resolved Claims, then you must take steps to get out. This is called excluding yourself - or is sometimes referred to as "opting out" of the Settlement Class. The Settling Defendants may withdraw from and terminate the Settlement if putative Class Members who purchased in excess of a certain amount of RediffADSs exclude themselves from the Class.

16. How do I get out of the proposed Settlement? To exclude yourself from the Settlement, you must send a letter by mail saying that you want to be excluded from the In re Rediffcom India Ltd. Securities Litigation, 01 CV 3020 (SAS). Be sure to include your name, address, telephone number, your signature and the date(s), price(s), and number(s) of all your purchases and sales of Rediff ADSs during the Class Period. You must mail your exclusion request postmarked no later than June 29, 2007 to: Rediff.com India Securities Litigation Exclusions c/o Berdon Claims Administration LLC P.O.

Box 9014 Jericho, NY 11753-8914 If you ask to be excluded, you will not get any Settlement payment, and you cannot object to the Settlement. You will not be legally bound by anything that happens in this lawsuit. You may be able to sue (or continue to sue) the Settling Defendants in the future.

17. If I do not exclude myself, can I sue the Settling Defendants and the other Released Parties for the same thing later? No. Unless you exclude yourself, you give up any rights to sue the Settling Defendants and the other Released Parties for any and all Resolved Claims, and you covenant not to sue the Underwriter Defendants with respect to the Non-IPO Causes of Action. If you have a pending lawsuit speak to your lawyer in that case immediately. You must exclude yourself from this Class to continue your own lawsuit. Remember, the exclusion deadline is June 29, 2007.

18. If I exclude myself, can I get money from the proposed Settlement? No.

If you exclude yourself, do not send in a Proof of Claim form to ask for any money. But, you may exercise any right you may have to sue, continue to sue, or be part of a different lawsuit against the Settling Defendants and the other Released Parties. THE LAWYERS REPRESENTING YOU 19. Do I have a lawyer in this case? The Court appointed the law firm of Lovell Stewart Halebian LLP, 500 Fifth Avenue, New York, NY 10110, Telephone: (212) 608-1900, to represent you and other Class Members with respect to the Non-IPO Causes of Action. With respect to the IPO Causes of Action, the Court has appointed a six-member Plaintiffs' Executive Committee to represent the Plaintiffs and Classes in In re Initial Public Offering Sec.

Litig., 21 MC 92 (SAS).

You will not be charged for these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense. 20. How will the lawyers be paid? The law firm of Lovell Stewart Halebian LLP will ask the Court to approve payment of attorneys' fees for Plaintiffs' Counsel from the Settlement Fund in an amount not greater than thirty-three and one-third percent (33-1/3% or $833,333) of the Settlement Fund and for reimbursement of their expenses in an amount not to exceed $110,000.00, plus interest at the same rate as earned by the Settlement Fund. The requested fees and expenses would amount to an average of 2.90 per allegedly damaged ADS.

Plaintiffs' Counsel expended considerable time and effort in the prosecution of this litigation, including through the successful opposition to the Settling Defendants' motions to dismiss, and through discovery and mediation efforts. Plaintiffs' Counsel worked wholly on a contingent-fee basis, and advanced the expenses of the litigation, in the expectation that if they were successful in obtaining a recovery for the Class they would be paid from such recovery. In this type of litigation it is customary for counsel to be awarded a percentage of the common fund recovery as their attorneys' fees and reimbursement of expenses for investigating the facts, litigating the case, and negotiating the Settlement.

Plaintiffs' Counsel, without further notice to the Class, will subsequently apply to the Court for payment of the Claims Administrator's fees and expenses incurred in connection with giving notice, administering the Settlement and distributing the Settlement proceeds to the members of the Class. OBJECTING TO THE SETTLEMENT You can tell the Court that you do not agree with the Settlement or some part of it. 21. How do I tell the Court that I do not like the proposed Settlement? If you're a Class Member, you can object to the Settlement if you don't like any part of it. You can give reasons why you think the Court should not approve it.

The Court will consider your views. Additionally, at the Settlement Fairness Hearing (described below), any Class Member who has not previously submitted a request for exclusion from the Class may appear in person or by counsel and be heard to the extent allowed by the Court in opposition to the fairness, reasonableness and adequacy of the Settlement, the Plan of Allocation, or the motion for an award of attorneys' fees and reimbursement of expenses. To object, you must send a letter saying that you object to the Settlement in In re Rediffcom India Ltd. Securities Litigation, 01 CV 3020 (SAS).

Be sure to include your name, address, telephone number, your signature, and the reasons you object to the Settlement. Additionally, you should state if you or your representative will appear at the Settlement Fairness Hearing and provide proof of Class membership, such as a description of transactions involving Rediff ADSs during the Class Period. Mail the objection to the following three different places postmarked no later than June 15, 2007: COURT Clerk of the Court United States District Court Southern District of New York Daniel Patrick Moynihan United States Courthouse 500 Pearl Street New York, NY 10007 PLAINTIFFS ' COUNSEL Victor E.

Stewart, Esq. Ian T. Stoll, Esq. LOVELL STEWART HALEBIAN LLP 500 Fifth Avenue New York, NY 10110 Telephone: (212) 608-1900 DEFENDANTS' COUNSEL Jayant Tambe, Esq. JONES DAY 222 East 41s' Street New York, NY 10017 Telephone: (212) 326-3604 You do not need to go to the Settlement Fairness Hearing to have your written objection considered by the Court. At the Settlement Fairness Hearing, any Class Member who has not previously submitted a request for exclusion from the Class and who has complied with the procedures set out in this Question 21 and Question 25 for filing with the Court and providing to the counsel for Plaintiffs and Defendants a statement of an intention to appear at the Settlement Fairness Hearing may also appear and be heard, to the extent allowed by the Court, to state any objection to the Settlement, the Plan of Allocation or Plaintiffs' Counsel's motion for an award of attorneys' fees and reimbursement of expenses.

Any such objector may appear in person or arrange, at that objector's expense, for a lawyer to represent the objector at the Settlement Fairness Hearing. 12

22. What is the difference between objecting and excluding? Objecting is simply telling the Court that you do not like something about the proposed Settlement. You can object only if you stay in the Class. Excluding yourself is telling the Court that you do not want to be part of the Class. If you exclude yourself, you have no basis to object because the case no longer affects you. THE COURT'S SETTLEMENT FAIRNESS HEARING The Court will hold a Settlement Fairness Hearing to decide whether to approve the proposed Settlement. You may attend and you may ask to speak, but you do not have to.

23.

When and where will the Court decide whether to approve the proposed Settlement? The Court will hold a Settlement Fairness Hearing at 4:30 p.m. on July 12, 2007, at the United States District Court for the Southern District of New York, 500 Pearl Street, New York, NY 10007. At the Settlement Fairness Hearing, the Court will consider whether the Settlement is fair, reasonable and adequate . The Court will also consider the proposed Plan of Allocation for the proceeds of the Settlement and the application of Plaintiffs' Counsel for attorneys ' fees and reimbursement of expenses. The Court will take into consideration any written objections filed in accordance with the instructions at Question 21.

The Court also may listen to people who have properly indicated, within the deadline identified above, an intention to speak at the Settlement Fairness Hearing; but decisions regarding the conduct of the Settlement Fairness Hearing will be made by the Court. See Question 25 for more information about speaking at the Settlement Fairness Hearing. The Court may also decide how much to pay to Plaintiffs' Counsel. After the Settlement Fairness Hearing, the Court will decide whether to approve the Settlement. We do not know how long these decisions will take. You should be aware that the Court may change the date and time of the Settlement Fairness Hearing.

Thus, if you want to come to the Settlement Fairness Hearing, you should check with Plaintiffs ' Counsel before coming to be sure that the date and/or time has not changed.

24. Do I have to come to the Settlement Fairness Hearing? No. Plaintiffs ' Counsel will answer questions the Court may have. But, you are welcome to come at your own expense. If you send an objection, you do not have to come to Court to talk about it. As long as you filed your written objection on time, the Court will consider it. You may also pay your own lawyer to attend, but it is not necessary. Class Members do not need to appear at the Settlement Fairness Hearing or take any other action to indicate their approval.

25. May I speak at the Settlement Fairness Hearing? If you object to the Settlement, you may ask the Court for permission to speak at the Settlement Fairness Hearing.

To do so, you must include with your objection (see Question 21) a statement stating that it is your "Notice of Intention to Appear in In re Rediff com India Ltd. Securities Litigation, 01 Civ 3020 (SAS)." Persons who intend to object to the Settlement, the Plan of Allocation, and/or Plaintiffs' Counsel's application for an award of attorneys ' fees and expenses and desire to present evidence at the Settlement Fairness Hearing must include in their written objections the identity of any witnesses they may call to testify and exhibits they intend to introduce into evidence at the Settlement Fairness Hearing.

You cannot speak at the Settlement Fairness Hearing if you excluded yourself from the Class or if you have not provided written notice of your intention to speak at the Settlement Fairness Hearing by the deadline identified, and in accordance with the procedures described in Question 21 and above in this paragraph.

IF YOU DO NOTHING 26. What happens if I do nothing at all? If you do nothing, you will get no money from this Settlement and you will be precluded from starting a lawsuit, continuing with a lawsuit, or being part of any other lawsuit against the Settling Defendants and the other Released Parties about the Resolved Claims in this case ever again, and you will have dismissed and covenanted not to sue any of the Underwriter Defendants on any Rediff Non-IPO Causes of Action. To share in the Net Settlement Fund you must submit a Proof of Claim form (see Question 13).

To start, continue or be a part of any other lawsuit against the Settling Defendants and the other Released Parties about the Resolved Claims, or to sue the Underwriter Defendants about any Rediff Non-IPO Causes of Action in this case, you must exclude yourself from this Class. See Question 16.

GETTING MORE INFORMATION 27. Are there more details about the proposed Settlement? This Notice summarizes the proposed Settlement. More details are in a Stipulation and Agreement of Settlement as amended and restated on February 15, 2007 (the "Stipulation"). You can get a copy of the Stipulation by writing to Victor E. Stewart, Esq. or Ian T. Stoll, Esq., Lovell Stewart Halebian LLP, 500 Fifth Avenue, New York, NY 10110, Telephone : (212) 608-1900, or by visiting www.berdonclaims.com . You can also contact the Claims Administrator by mail at: Rediff.com India Securities Litigation, c/o Berdon Claims Administration LLC, P.O.

Box 9014, Jericho , NY 11753-8914; by toll-free phone at: (800) 766-3330 ; by fax at: (516) 931-0810; or visit the website at www.berdonclaims .com, where you will find answers to common questions about the Settlement, a Proof of Claim form, plus other information to help you determine whether you are a Class Member and whether you are eligible for a payment. 28. How do I get more information?

For even more detailed information concerning the matters involved in this Action, reference is made to the pleadings, to the Stipulation , to the Orders entered by the Court and to the other papers filed in the Action, which may be inspected at the Office of the Clerk of the United States District Court for the Southern District of New York, Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, NY 10007 during regular business hours. UNDERSTANDING YOUR PAYMENT 29. How will my losses be calculated? How does the Claims Administrator handle the situation when the total claims exceed the money in the Settlement Fund?

The Court has preliminarily approved a "Plan of Allocation of Net Settlement Fund Among Class Members" which is applied by the Claims Administrator for determining individual losses, the portion of the losses ascribable to the alleged misconduct and the allocation of funds to each claimant. This is how it works. The $2,500,000 Cash Settlement Amount and the interest earned thereon shall be the Gross Settlement Fund. The Gross Settlement Fund, less all taxes, approved costs, fees and expenses (the "Net Settlement Fund") shall be distributed to members of the Class who submit acceptable Proofs of Claim ("Authorized Claimants").

The Claims Administrator shall determine each Authorized Claimant's pro rata share of the Net Settlement Fund based upon each Authorized Claimant's "Recognized Claim" The Recognized Claim formula is not intended to be an estimate of the amount of what a Class Member might have been able to recover after a trial; nor is it an estimate of the amount that will be paid to Authorized Claimants pursuant to the Settlement. The Recognized Claim formula is the basis upon which the Net Settlement Fund will be proportionately allocated to the Authorized Claimants.

The following proposed Plan of Allocation reflects the Plaintiffs' allegations that the price of Rediff ADSs was created and inflated artificially, by reason of allegedly false and misleading statements made by the Defendants. The alleged artificial inflation began with the Registration Statement and Prospectus for the June 14, 2000 initial public offering of Rediff ADSs. The price of Rediff ADSs allegedly continued to be artificially inflated thereafter (albeit at declining prices) through most of the Class Period. The alleged inflation dissipated throughout the class period, most prominently on February 15, 2001 with a disclosure concerning Rediff's email problems, which allegedly caused a 15% drop in the price of Rediff ADSs, and on March 22, 2001, with a disclosure of the fact that Richard Li had not graduated from Stanford University, which allegedly caused a little more than a 7% decline in the price of Rediff ADSs by the close of trading on April 4, 2001.

In the 90-day period from April 4, 2001 to July 3, 2001 following the end of the Class Period, the price of Rediff ADSs rebounded somewhat to an average of $2.69 per ADS. For purposes of allocating the Settlement's proceeds, the following Plan of Allocation formulae consider the price of Rediff ADSs to have been inflated by as much as 22% from the beginning of the Class Period on June 14, 2000 until March 22, 2001 and by as much as 7% from March 22 through the close of trading on April 4, 2001, the end of the Class Period. Recognized Claims will be calculated for purposes of the Settlement as follows, based upon two possible time periods for the purchase of Rediff.com ADSs and four possible time periods for the sale (or retention) of those Rediff.com ADSs : PURCHASE PERIOD "A": For Rediff ADSs purchased during the period between June 14, 2000 and March 22, 2001, inclusive: (a) Sale Period 1 - ADSs sold at a loss on or before the close of trading on March 22, 2001: an Authorized Claimant's Recognized Claim shall be 10%2 of the difference between (i) 22% of the purchase price paid (including commissions, etc.), minus (ii) 22% of the sales proceeds received (net of commissions, etc.); (b) Sale Period 2 - ADSs sold at a loss during the period between March 23, 2001 and the close of trading on April 4, 2001, inclusive: an Authorized Claimant's Recognized Claim shall mean the difference between (i) 22% of the purchase price paid (including commissions, etc.), minus (ii) 7% of the sales proceeds received (net of commissions, etc.); (c) Sale Period 3 - ADSs sold at a loss during the period between April 5, 2001 and July 3, 2001 inclusive: an Authorized Claimant's Recognized Claim shall mean the lesser of: (i) 22% of the purchase price paid (including commissions, etc.), or (ii) the purchase price paid (including commissions, etc.) less the sales proceeds received (net of commissions, etc.); and (d) Sale Period 4 - ADSs still held at the close of trading on July 3, 2001: an Authorized Claimant's Recognized Claim shall mean the lesser of: (i) 22% of the purchase price paid (including commissions, etc.), or (ii) the purchase price paid (including commissions, etc.) less $2.69 per ADS held at the close of trading on July 3, 2001.

2 This discount reflects the relatively greater difficulty a claimant would face in proving that their loss was "caused" by Defendants' alleged misstatements and omissions when both the purchase and sale prices were made at a time when similar or the same alleged misstatements and omissions were prevalent. 15

You can also read
Next part ... Cancel