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.

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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 .

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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.

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