Turkcell Iletisim Hizmetleri AS (TCELL)’s main investors will ask for a deadline extension to elect independent board members to Turkey’s biggest mobile operator after it failed to convene a shareholders’ meeting.
TeliaSonera AB (TLSN), Altimo of Russia and Cukurova Holding AS have agreed to ask the regulator for an extension until “legal disputes between Altimo and Cukurova have ultimately been resolved and the parties are no longer bound by their shareholder agreement, which is expected towards the end of this year,” Stockholm-based TeliaSonera said in an e-mailed statement today.
Cukurova, Altimo, owned by Russian billionaire Mikhail Fridman’s Alfa Group, and TeliaSonera have been fighting a three-cornered battle for control of Istanbul-based Turkcell for almost a decade. While TeliaSonera is the largest shareholder with 38 percent, Cukurova has sought to retain control via a complex ownership structure even as its stake has declined to 13.8 percent.
TeliaSonera and Altimo blocked a decision on dividend payments in a series of shareholders’ meetings in 2011, after failing to oust Chairman Colin Williams from the board, claiming he hampered Turkcell’s growth by favoring Cukurova chairman and founder of Turkcell Mehmet Emin Karamehmet. Williams denied the allegations.
Altimo and TeliaSonera said June 26 that the shareholders’ meeting due today would be postponed because Altimo and Cukurova couldn’t agree on board structure, dividends and directorship candidates. The meeting could not take place because there was no quorum, TeliaSonera said today.
“The general assembly failed to take place due to Cukurova’s failure to agree on the identity of a person to represent Turkcell Holding - the controlling shareholder of Turkcell - at the meeting,” the Moscow-based Altimo said in an e-mailed statement today.
TeliaSonera will “do its utmost to make sure that Turkcell dividends can be paid, the articles of association changed and more independent board members elected, in line with the Capital Markets Board’s requirements,” it said in the statement.
“Increasing the number of independent board members to four out of 10 members would significantly improve corporate governance in Turkcell,” Cecilia Edstrom, a TeliaSonera spokeswoman, said in the statement. “However, this has been consistently rejected by Cukurova, as it would undermine their blocking position.”
Altimo, which owns 13.2 percent of Turkcell, is suing Cukurova over an alleged loan default and seeking to seize its Turkcell shares, which were pledged as collateral. That would increase Altimo’s stake to 27 percent. The Privy Council in London will make a final ruling on the case in December, Mustafa Kiral, an Altimo executive, said June 26.
The Privy Council, whose verdicts are final, “has ordered that neither Cukurova nor Alfa vote on any Turkcell matters unless they are in agreement how to vote,” until the ruling, Altimo said today. Altimo supports the payment of at least 75 percent of Turkcell’s 2010 profits and whole of 2011 profits as dividend, it said.
Officials from Cukurova Holding weren’t immediately available for comment.
Turkcell shares rose 2.7 percent to 9.18 liras at 3:52 p.m. in Istanbul. The main share index gained 1.9 percent.
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