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Ajit Balakrishnan: Rediff Buying Vubites Reduces Conflict Of Interest; Product, Target Market, Test Details

Rediff.com is holding a EGM, for shareholders to validate the board approved acquisition of Vubites, a digital cable ad insertion company founded by Rediff.com Chairman and CEO Ajit Balakrishnan. According to SEC filings (see this and this), which Mint reported from today, Rediff.com will pay an aggregate consideration of Rs. 1,31,20,399 for acquiring shares of Vubites, an additional Rs. 12,40,29,601 is paid towards loans given by Balakrishnan, and Rs. 1,28,50,000 is paid in lieu of the stock options granted to participants in the Vubites ESOP. That's a total outlay of Rs. 15 crore, or $3.37 million (at 1 USD = Rs. 44.43). The $13.1 million figure that Mint appears to be incorrect. Two days ago, we'd raised the flag of conflict of interest in the acquisition of Vubites by Rediff. Balakrishnan, who is currently in Central America. , and Balakrishnan addressed some of our queries. Excerpts from our conversation: MediaNama: How would you respond to the issue raised about conflict of interest in the purchase of Vubites by Rediff? Balakrishnan: (there is conflict of interest) If I continue doing the business (Vubites) as the CEO of Rediff, while we're operating in similar markets. The reason to buy is to reduce the conflict of interest since it (Vubites) will be a subsidiary. An EGM is not legally needed, but we're still going ahead with it, and we've followed all processes. MediaNama: Why wasn't the company started by Rediff.com itself in 2007? Why launch a separate company, only for it to be…

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Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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