High court quashes shareholders' plea against SSTL

The Rajasthan high court has dismissed an appeal by minority stakeholders against Sistema Shyam Teleservices Ltd (SSTL), which offers cellphone services under the MTS brand, thereby paving the way for the Russian firm to raise foreign direct investment (FDI).

SSTL stated on Monday that it would now be able to seek approval for a change in its shareholding pattern and/or clearance from the Foreign Investment Promotion Board (FIPB) to bring in 100 per cent foreign direct investment.

Minority shareholders have a 2.05 per cent stake in SSTl; while the Indian partner Shyam Telecom holds 24 per cent. A Shyam group spokesperson declined to comment.

Minority shareholders had filed an application seeking compulsory listing of shares of Sistema Shyam Teleservices in a set timeframe, an exit from the company at a pre-determined high price, and appointment of a representative of minority shareholders on the board of directors. "The order vindicates our stand that the company is committed to working in the interest of all shareholders, while maintaining highest standards of corporate ethics and governance," said Neera Sharma, executive director, legal, Sistema Shyam Teleservices.

FIPB had in September rejected Sistema Shyam Teleservices' proposal to raise foreign shareholding beyond 74 per cent, after the government allowed 100 per cent foreign direct investment in telecom. Russia's Sistema JSFC is majority shareholder with a 56.68 per cent stake while the Russian government holds 17.14 per cent and other foreign entities 0.13 per cent.