Bloomberg News

Turkcell Dividend Blocked After Walkout, TeliaSonera Says

October 12, 2011

(Adds shareholder walkout in second paragraph.)

Oct. 12 (Bloomberg) -- A dividend for shareholders of Turkcell Iletisim Hizmetleri AS, Turkey’s biggest mobile phone company, won’t be approved at a meeting today amid a dispute over the makeup of its board of directors, TeliaSonera AB said.

Executives of TeliaSonera and Alfa Group, which hold a majority of shares in the company, walked out of the extraordinary meeting in Istanbul and instructed their proxy voter to abstain from further voting, Cecilia Edstroem, a spokesman for TeliaSonera, said by telephone.

Cukurova Holding AS of Turkey is battling with TeliaSonera and Alfa for control of Turkcell in wrangling that’s escalated to court cases stretching from Geneva to the Caribbean islands. The extraordinary meeting held today had already been scheduled twice previously.

Turkcell rose 4.6 percent to 8.60 liras on the Istanbul Stock Exchange today, as investors bet the dividend would be paid. The share gained 5.4 percent to $11.875 in New York trading at 1:55 p.m.

TeliaSonera and Alfa took the decision to abstain from voting today after Turkcell Chairman Colin Williams, who TeliaSonera and Alfa want replaced, “took the law into his own hands” and blocked voting on the replacement of some board members with independents, Edstroem said. Williams has previously denied any wrong-doing.

Edstroem said TeliaSonera is looking forward to working with Turkish authorities to improve corporate governance at Turkcell. She said measures published yesterday by the capital markets regulator that require Turkey’s largest companies to appoint independent board members were “positive,” but Williams had ignored them.

Government representatives at today’s meeting took the item allowing changes to Turkcell’s board off the agenda after pressing shareholders not to vote, Soner Bahcuvan, who represents Turkcells’ minority shareholders, said by phone.

--Editors: Mark Bentley, Ben Holland

To contact the reporter on this story: Benjamin Harvey in Istanbul at bharvey11@bloomberg.net

To contact the editor responsible for this story: Mark Bentley at mbentley3@bloomberg.net


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