FIPB clears SSTL?s request to allow foreign ownership of more than 74 per cent

The Foreign Investment Promotion Board (FIPB) has approved the request from Sistema Shyam TeleServices Limited (SSTL) to increase its foreign shareholding to over 74 per cent. SSTL, however, did not disclose the extent to which the foreign ownership will be increased. At present, Russia-based Sistema owns 56.68 per cent of SSTL, while the Russian government and other foreign entities holds 17.14 per cent and 0.13 per cent stake respectively.

FIPB, in September 2014, had rejected SSTL?s request of increase in foreign ownership due to confusion over the mode of investment proposed by Sistema. The Russian company had proposed to use redeemable preference shares and convertible redeemable preference shares, which did not qualify as foreign direct investment according to the Department of Telecommunications. The department further contended that the proposal that was structured as overseas debt would require approval from the Reserve Bank of India.