Rediff May Ask CyberWorks to Clarify Li Qualification (Update3)
By Arijit Ghosh
Mumbai, March 26 (Bloomberg) -- Rediff.Com India Ltd. may ask Pacific Century CyberWorks Ltd. for a clarification on the educational qualifications of Richard Li, founder of CyberWorks and a director of Rediff, an official of the Indian company said.
Clarification would be sought after CyberWorks' said last week that Li didn't graduate from Stanford University, as was asserted in some of the Hong Kong firm's publicity materials. The CyberWorks chairman is described as a Stanford graduate in documents filed by Rediff, a Nasdaq-listed company, at the U.S. Securities and Exchange Commission.
``In such cases, we would probably ask the company to explain,'' said Rajiv Warrier, chief financial officer of Rediff. External directors, such as Li, have to provide documents that list educational qualifications among other details.
CyberWorks, which said last week that Li's description as a Stanford graduate on its Web site was limited to publicity information and ``did not appear in public disclosures filed by the company,'' contacted Rediff.com Chief Executive Ajit Balakrishnan on Friday, said CyberWorks spokeswoman Joan Wagner.
Balakrishnan, who Wagner said had been sent a letter clarifying the situation, was not immediately available for comment.
A Rediff official who asked not to be identified said it's possible Balakrishnan had not been in touch with his colleagues regarding the CyberWorks letter because it was a public holiday in Mumbai on Monday.
CyberWorks said Li's academic background was incorrectly described in filings by two companies at which he served as director -- MediaRing.com Ltd. and Rediff -- and that steps were being taken to correct the mistake.
Share Slump
The disclosures are an embarrassment for CyberWorks, an Internet and telecommunications company whose shares have slumped 81 percent in 12 months. Four of seven analysts polled by Bloomberg News expect the company to post a full-year loss when it reports results on Wednesday on higher interest payments and write- offs on Internet investments.
MediaRing.com of Singapore describes him as an electrical engineer from Stanford in its filings. Rediff, in which Li has been a director since April 2000, describes him as holding a ``B.S. degree in computer engineering,'' in documents filed in the U.S. before the sale of American depositary shares last June.
``It brings into question the future accuracy of any statements which are not filed by (CyberWorks) with regulators,'' said David Webb, editor of Webb-site.com. ``The fact that in Thursday's statement the company placed such emphasis on regulatory filings suggests a lower standard of care is applied to press releases and any other unofficial material.''
MediaRing.com Chief Executive Ng Ede Phang said Saturday that the CyberWorks chairman has been in touch with him.
``Li has already given us clarification as to the error in the documents,'' said Ng, who runs the Singapore-based Internet telephone company. ``I only received it late last night. I have not had a chance to talk to my colleagues on what to do next. The information was from their office but they declared the information was not right.''
The initial disclosure from CyberWorks came after inquiries by the International Herald Tribune newspaper about Li's academic background. The company said that Li himself had never claimed to have received a degree.
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