Gurgaon, India, January 19, 2015: The High Court of Rajasthan at Jaipur vide its final Order (Case No. 45/2012 in SB Company Petition No. 23/ 2005) passed by Honorable Justice Mr. Alok Sharma dated 09.01.2015 has ruled in favor of Sistema Shyam TeleServices Limited (SSTL), while dismissing the application filed by certain minority shareholders. The minority shareholders had filed an Application seeking compulsory listing of shares of SSTL in a fixed timeframe; exit from the company at a pre-determined high price and appointment of representative of minority shareholder on the Board of Directors.
The High Court while dismissing the Application filed by the minority shareholders ruled that listing of SSTL was not a mandatory part of scheme of arrangement and listing of SSTL’s shares on the Stock Exchanges within a specified time cannot be held to be the raison d’ ere of the scheme of arrangement sanctioned by the High Court in 2006. Furthermore, share price are not static but dynamic in nature and reference to share prices of SSTL historically from time to time in different fact situations and contexts is of no avail.
The court also held that determination of exit price is a vexed issue of fact relating to substantive rights and cannot be addressed in a Rule 9 Company (Court) Rules, 1959 and falls beyond the jurisdiction of company court. The Hon’ble court found no force in the Application and accordingly dismissed the same.
Commenting on Rajasthan High Court’s order, Neera Sharma, Executive Director- Legal, SSTL said, “The favorable order passed by the Honorable High Court of Rajasthan vindicates SSTL’s stand, that the Company is committed towards working in the interest of all shareholders while maintaining the highest standards of corporate ethics and governance.”
It is to be noted that certain minority shareholders in recent past had earlier written to the FIPB citing pendency and orders passed in the aforesaid proceedings with an intent to scuttle SSTL’s 100% Foreign Direct Investment (FDI) plans, which was vehemently opposed and refuted by the Company. With the dismissal of the application filed by the minority shareholders, Sistema Shyam TeleServices Ltd, which provides its telecom services under brand MTS, can now freely move ahead for approvals to change its shareholding pattern and/or FIPB approvals to bring in 100% FDI.