Friday, March 2, 2012

In your Letter to SSTL - Please mention...

The following may be sent in your letter to the Company to rashid.malik@mtsindia.in


1. Mention Name and Address of investor
2. Give detail of No of shares and DP details
3. You may Demand exit offer at fair price as per direction of Rajasthan High Court order of aug 2008
4. You may Demand response from company why company has not offered the same and the required timeline to execute the same now.

If you would like to send a regular mail, the address is
Corporate Office: MTS Towers 334, Udyog Vihar, Phase-IV Gurgaon - 122001 Haryana.

Economic Times : Company says not enough people asking for exit !!

“SSTL has thousands of shareholders and is yet to receive any concern relating to the exit option from even 100 shareholders,” the company has said


We at AMSOST would like all shareholders to write to the company to give the court directed exit option.
The e-mails may be directed to the Co. Secy Sh. Rashid Malik at rashid.malik@mtsindia.in
Alternatively the emails may be sent to amsost@gmail.com and we will forward the same.
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Minority Sistema Investors Left High & Dry

With cancellation of telecom licences, 7-yr wait of 18k investors to get dues got longer

OUR BUREAU MUMBAI


More than 18,000 minority shareholders of Sistema Shyam TeleServices are probably nearing a dead end after aseven-year wait to get what is due to them just got complicated with the Supreme Court cancelling 122 mobile telecom licences.
The stakeholders who fought a legal battle with Shyam Telecom and its promoters Rajiv Mehrotra and Alok Tandon for not fulfilling a court direction to list the shares, see little
signs of benefits accruing to them now after the court ruling. “There is no hope,’’ says Gokulchand Bansal, an investor from Kolkatta who owns around 5,000 shares in the company. “Despite the court order, company has not provided any exit opportunity. We don’t know whom to approach with our grievances.’’
The board of directors of Sistema Shyam TeleServices, the mobile phone operator that runs the MTS brand of services, will meet in March to consider the minority holders’ grievances, but it may be too late since the business prospects of the company are uncertain after the court order, said a person familiar with the development.
In 2005, Shyam Telecom was split into two, with the second company being Shyam Telelink which has been rechristened Sistema Shyam Tele-Services which is now a joint venture
with Russia’s Sistema. Owners of Shyam Telecom got 35 shares of the company, and 784 shares of Shyam Telelink for every 100 shares they held. That translated into an 85% ownership for promoters and 15% for minority shareholders in Shyam Telelink. Shyam Group promoters’ intent has been questioned by minority holders when the company did not fulfill the Rajasthan High Court order to list the spun off company, Shyam Telelink, in 2005. While the normal process leads to listing of the spun-off entity, Shyam Telelink did not get listed on the stock exchanges. But it sold new shares that diluted minority holders.
“SSTL has thousands of shareholders and is yet to receive any concern relating to the exit option from even 100 shareholders,” the company said. “The matter is still under progress and all the shareholders of the com
pany are also informed on the matter.” But between the 2006 court approval and now, the promoters sold new shares in Sistema Shyam that brought down minority holders’ stake to just 2%, from 15%.
From September 2007 to March last year, Sistema and the Russian Russian Federal Agency-Rosimushchestvo’s stake rose to 74% from 10%. Because of the change in the shareholding pattern and other reasons, Sebi declined to allow the company to list Sistema Shyam’s shares. Following this, the promoters sought High Court permission to drop the listing condition which was a precondition to approve splitting of the company. But that was dismissed.
Since Sebi declined to hear out minority holders, citing that it is an unlisted company, many retail shareholders have written to the ministry of corporate affairs to bail them out.

Thursday, March 1, 2012

MTS India claims refuted by AMSOST..

As per MoneyLife Article published today(reproduced below).....the company has claimed it has begun initiatives to meet the minority shareholders for offering a exit option (Highlighted in red below) .  AMSOST would like to categorically point out that NO SUCH offers or initiatives are in our current knowledge.


We at AMSOST would like all shareholders to write to the company to find out about the exit options.
The e-mails may be directed to the Co. Secy Sh. Rashid Malik at rashid.malik@mtsindia.in
Alternatively the emails may be sent to amsost@gmail.com and we will forward the same.
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Sistema Shyam blames SEBI, BSE and NSE for not listing the company
March 01, 2012 05:55 PM | Bookmark and Share
Moneylife Digital Team
The mobile operator, in which Russian government has a stake, was quick to invoke its right under BIT signed between India and Russia after its licence got cancelled by the apex court. However, for over 42 months it has sidelined a high court decision and is blaming the regulators for non-listing

Sistema Shyam TeleServices (SSTL), which operates under the MTS brand in India, has said that the failure of its listing is a consequence of differences in perception on part of the statutory agencies—the Securities and Exchange Board of India (SEBI), National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The company was asked by the Rajasthan High Court to initiate listing process within 18 months starting from 8 August 2008. It is now over 42 months and the company has yet to fulfil the condition.

Surprisingly, earlier this week, SSTL’s parent Sistema JSFC sent a formal notice to the Government of India for honouring the ‘Bilateral Investment Treaty’ (BIT) to protect its investments in the company. This follows a judgement by the Supreme Court to cancel 122 telecom licenses, including 21 licenses of SSTL.

Sistema is the majority shareholder with 56.68% stake while Shyam Group and the Russian government hold 23.98% and 17.14% stake, respectively, in SSTL. Minority shareholders, who have allegedly been sidelined and not given appropriate valuation for their investment as well as an exit option by SSTL have 2.2% stake in company.

In an email reply, SSTL said, “...the company had made every possible effort to get the shares of the company listed in terms of the scheme and the failure of listing was a consequence of differences in perception on part of the statutory agencies, namely, SEBI, NSE and BSE. On account of disinclination expressed by SEBI; for allowing listing via the automatic route despite the in-principle approval granted by BSE, listing became a virtual possibility and to that extent implementation of the said clause (i.e. Clause 3.7) became impossible.”

The company is now citing adverse market conditions, especially after the judgement from the apex court for keeping its decision on hold for listing on Indian bourses. “The company has faithfully and scrupulously initiated the process of listing with the active involvement of internal committees of highest levels and with the advice of the merchant banker of international repute. But everyone would agree that in the current situation after the judgment of SC on licenses, all such big strategic issues cannot be processed further and are bound to be kept on hold till attaining the matter legal and regulatory finality from the government,” it said.

According to the scheme of arrangement passed by the Rajasthan High Court in 2008, the shareholders of Shyam Telecom (STL), a listed company, were allotted shares of Shyam Telelinks (STLL). At that time Shyam Telelinks was valued at Rs455 crore with 85% stake hold by promoters and rest by minority shareholders. As per the high court ruling STLL was asked to initiate listing process within 18 months starting from August 2008.

In September 2007, Sistema bought 10% stake in STLL for about $11.4 million and said that it would increase the stake to 74% following an approval from the Foreign Investment Promotion Board (FIPB). Following the stake sale, STLL, which used to operate CDMA and wireline services only in Rajasthan circle at that time, changed its name to Sistema Shyam TeleServices (SSTL).

STLL applied for licenses in 21 circles on 25 September 2007 (the date on which the first cut off date for 2G licenses was announced and subsequently this date was announced as revised cut off date). On the very next day (26th September) Sistema announced that it bought a 10% stake in STLL. As per the requirement of getting the licenses, the applicant should have a net worth of Rs11,380 crore and paid-up capital of Rs1,138 crore. Shyam Telelinks, at that time, had a net worth of Rs1,156.58 crore only. However, following stake sale to Sistema, the company was able to include the Russian conglomerate’s net worth (about Rs158,856 crore) as well, to fulfil the license condition.

While the high court was approving the scheme of arrangement for STLL, the company become the first new mobile operator to get a pan-India start-up spectrum for starting its mobile services. In January 2008, Sistema provided guarantee of $520 million of total $630 million (82.5% of total amount) to be paid for obtaining the licences by STLL despite having a shareholding of 10%. Subsequently, on 18 January 2008, Sistema increased its shareholding in SSTL to 51% from 10% for which it had signed a share purchase agreement in October 2007.

When Sistema first bought 10% stake in STLL for $11.4 million, the mobile operator was valued at around Rs1,450 crore. In January 2008, SSTL paid Rs1,653 crore for 2G licenses in 21 circles. A week later, Sistema increased its stake in SSTL to 51% by paying $46.7 million that shows there was not much change in SSTL's valuation.

According to a petition filed in December 2011 by Prashant Bhushan in the Supreme Court in March 2011, Rosimushestvo, the Russian Federal Agency for State Property Management, paid Rs12,669 crore for a 17.14% stake in SSTL. This deal increased the valuation of SSTL to Rs73,914.8 crore, several times higher than its original valuation when Sistema first brought stake in the company. However, SSTL has been left out of the 2G investigation because of the government’s intervention, Mr Bhushan had said in his petition.

In all the hype around stake sale, purchase and valuation, minority shareholders, who held about 15% in STL were left high and dry. Following stake sale by STL and to Sistema, minority shareholders’ stake got reduced to a mere 2.5%. Sistema, in a filing to the London Stock Exchange, said that on 23 May 2008 it bought additional 21% stake at minimum of Rs156 per share from the Indian promoters with an option of upping this amount if the fair value in September in 2009 was even more. However, when the Russian Federal Agency bought the stake in SSTL, the company had said that it would issue fresh equity shares at Rs49.31 per share for an investment of about $676 million. Both the times, minority shareholders were not provided any exit option at that value.

“In view of the changed conditions after SC judgment, the management has begun its initiatives to meet the minority shareholders and discuss the company’s current status, significant and serious legal and financial challenges before the company and also any alternate to the listing including exit option. This process will continue simultaneously along with the company’s fight for licenses and at the appropriate time, the whole matter will be placed before the board for a reasonable decision/direction in the matter,” SSTL said in the email reply.

However, Association of Minority Shareholder of SSTL, in an email clarified that they have not recieved any offer/ initiative for exit option from the company.

Disclaimer

A BLOG FOR ALL THE SHAREHOLDERS OF SSTL (FORMERLY SHYAMTELELINK LTD) TO COME TOGETHER AND DISCUSS ISSUES OF COMMON INTEREST. YOU CAN REACH US AT AMSOST@GMAIL.COM