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The Finance Ministry has rejected Sistema Shyam Teleservices' (SSTL) proposal to increase foreign stake to 100% due to conversion of redeemable preference shares into equity.
SSTL, controlled by Russian conglomerate Sistema JSFC, had applied in May to increase the total FDI in the company beyond 73.95%.
Increases in FDI up to 100% in M/s Sistema Shyam Tele Services Limited and its downstream WoS M/s Shyam Internet Services Limited, both engaged in telecom sector, on account of conversion of Redeemable Preference Shares into equity have been rejected, the Foreign Investment Promotion Board (FIPB), a multi-department panel headed by Finance Secretary, said in a statement.
The meeting of FIPB took place on September 16.
Sistema JSFC holds 56.68% in SSTL, Russian government 17.14% and 0.13% other foreign entities.
The government in July 2013 had allowed 100% FDI in telecom companies.
SSTL, which offers services under MTS brand name, has presence in 9 telecom circles.
