We have just received an official clarification from Yug Samrat, Company Secretary & GM-Legal, Infomedia 18 Limited, categorically asserting that Haresh Chawla is not a shareholder in Burrp!
MediaNama apologizes for any information that may have indicated otherwise – our information was based on highly placed sources, who we trusted had intimate knowledge of the deal between Chawla and Burrp.
Previous Update: Reliable Network18 sources have informed us that Haresh Chawla was not a shareholder in Burrp – he had loaned money to them, and a term sheet had been signed, by virtue of which he had the option to acquire shares in the company. Apparently, that option had not been exercised. Do note that neither Haresh Chawla nor Deap Ubhi have gotten back to us, so we have no official confirmation of this. Chawla is yet to respond to emails, Ubhi to calls and SMS’. (Update: See update from Infomedia18 above)
Original Story: Infomedia 18 has informed the Bombay Stock Exchange that they have “acquired the local information and social media business of burrp! Software Pvt Ltd on going concern basis including the ‘burrp’ brand with effect from March 15, 2009. The management believes that the said acquisition will create an important asset for the Company’s local search initiatives in the emerging media space.”
We had heard of the deal from our sources, but the information was released before we could confirm it. According to our sources, Burrp is being dissolved. VCCircle has also reported this story.
While Burrp was founded by Deap Ubhi and Anand Jain, Anand Jain is listed as the company’s only shareholder, according to documents in our possession. Also note that Burrp has not disclosed their shareholding structure, and doesn’t even appear to have filed financial returns till date. There have been murmurs of a disagreement between Burrp founders. Update: Also note that in a 2006 interview, Ubhi had mentioned that the company had 5 founders. (Thanks for pointing it out in the comments )
Haresh Chawla Majority Shareholder In Burrp? Related Party Transaction?
What’s interesting about this deal is that, according to our sources, Haresh Chawla, CEO of the Network18 Group was the largest shareholder in Burrp, with about 50% stake (Update: Not true. Check update from Infomedia18 above). We’re told that had put in close to $1 million in Burrp. So has Infomedia18 bailed out Haresh Chawla’s investment in Burrp? Also, if this was a related party transaction – why was it not disclosed to the markets? We think adequate disclosures should have been made. We’ve written to Haresh Chawla for comments, but neither he nor Burrp CEO Deap Ubhi have responded yet.
This may not be the first related party transaction from the Network18 Group – in the past, the groups venture investment firm Capital18 has picked up stake in Tangerine Digital, a company in which Network18 promoter Raghav Bahl owned a stake of around 50%, through holding company VT Holdings.
PLEASE NOTE: We’ve moderated comments that had anonymous and unsubstantiated allegations against Deap Ubhi, CEO of Burrp. Please note that we may be held liable for your comments, and hence cannot allow such comments. Please choose your words carefully when leaving a comment, and we might be able to let it through.
(Updates: rewrittern story for readability. Added updates of company filings, and ambiguity of shareholding structure; updated information from Network18 sources. Added update from Infomedia18)
Disclosure: I own an inconsequential number of shares of Network18