2G row: Russia mulls retaliatory action over Sistema issue

CNBC-TV18 learns from sources that no action has yet been taken by the Russian government but the expropriation threat hangs heavy.

Russian telecom major Sistema holds 56.68% stake in Sistema Shyam Teleservices, whose 21 out of 22 licences were cancelled by the Supreme Court in February on the grounds that the 122 permits issued by the then Telecom Minister A Raja were 'arbitrary and unconstitutional'.

The Russian government holds 17.14% stake in SSTL.

Earlier, CNBC-TV18 had reported that the telecom major had filed a curative petition at the Supreme Court. The petition seeks a review of the 2G licence cancellation. It argues that Sistema was the lone CDMA bidder.

Sources say the notice under Bilateral Investment Treaty (BIT) is likely if curative petition is dismissed. And post notice, expropriation process could start. The "blunt" message has been conveyed to India by top Russian leaders. 

Indian assets in Russia will face action over Sistema loss, say sources.

There are also veiled warnings from Russia on the ONGC  investments. Sources say ONGC Videsh Limited (OVL) is unlikely to get any fiscal concession from Russia. "The positive sentiment for India and Indian companies has been diluted at all levels," the Russian source said.

Russia has hinted at Indian investment in its oil and gas fields getting impacted in the wake of problems its telecom major Sistema faces here due to the cancellation of its 2G licences.

Sistema, which has invested USD 3 billion so far in India, has put all its major capex plans on hold.

ONGC has a stake in 'Sakhalin I' since 2001, and in 2009, the PSU had acquired Imperial Energy for USD 2.1 billion. 

Sources say the Russian parliament has set up a high-level panel on Sistema. Russian MPs will talk directly with their Indian counterparts, in a bid to resolve the issue before President Vladimir Putin's October-end visit.

Back home, the UPA government watching the situation closely, taking the views of various ministers. It has also set up a high-level panel to find a solution on the issue.

Sources say diplomatic talks are on to diffuse the volatile situation.