Telecom Department May Seek Shareholding Data From SSTL for FDI Hike: Report

The Department of Telecom (DoT) is likely to seek tentative shareholding pattern from Sistema Shyam Teleservices Ltd (SSTL) along with the approximate amount that it plans to bring in after raising FDI limit in the company as there are "some discrepancies", according to an official source.

SSTL, which operates under MTS brand, has sought approval of the Foreign Investment Promotion Board (FIPB) to raise FDI limit in it from 73.95 at present.

"There are some discrepancies in the FIPB application and it is proposed that we may seek...tentative shareholding of SSTL post conversion of redeemable preference shares in to equity shares and approximate amount of FDI inflow during the proposed transactions," the source said.

Russian conglomerate Sistema JSFC holds a 56.68 per cent stake in SSTL, Russian government 17.14 per cent and other foreign entities 0.13 per cent.

DoT sources said that SSTL has not provided the board resolution for raising FDI limit which may be required.

SSTL has also mentioned about Insitel Services Private Limited, a subsidiary of Singapore-based SSA Fund, which is in business of distribution of handsets, data cards and other telecom products, as an investor in the company.

Official sources said that SSTL will have to seek approval for inflow of FDI from SSA as it is a foreign entity and provide details of its board members.

When contacted, SSTL spokesperson said, "SSTL is not privy to any such issue as no query has been posed to the company."

Sources that Sistema has plans to go solo but final details with its Indian partner are yet to be worked out.

Earlier this month, Russian conglomerate Sistema JSFC-controlled telecom operator Sistema Shyam Teleservices had sought the government approval to raise foreign stake in the firm beyond the current about 74 per cent.

"We hereby submit our application for seeking approval of the FIPB for effecting a change in the existing foreign shareholding and for increasing the total FDI in the company beyond 73.95 per cent...." Sistema Shyam Teleservices (SSTL) said in its application submitted to the FIPB.

The government in July, 2013 had allowed 100 per cent FDI in telecom companies.