Turkey’s Capital Markets Board (SPK) has appointed two additional independent members to the Turkcell management board following the feuding shareholders’ failure to appoint their own.
The move brings the number of government-appointed directors to…
Turkey’s Capital Markets Board (SPK) has appointed two additional independent members to the Turkcell management board following the feuding shareholders’ failure to appoint their own.
The move brings the number of government-appointed directors to five, giving them a majority membership on the seven-seat board. SPK has asked the major shareholders to nominate two candidates each for the remaining board seats within 15 days.
SPK, which said last month that it would appoint the two board members, has now named them as Mehmet Bostan and Bekir Pakdemirli. Bostan is chairman of state-controlled bank VakifBank’s pension arm and Pakdemirli is the vice president of the ruling AK party’s Izmir region. The pair will remain on the board until Turkcell shareholders appoint their own independent directors, the authority said.
Turkcell’s three major shareholders – Russia’s Altimo, Turkey’s Cukurova and Sweden’s TeliaSonera – have disagreed over the mobile operator’s ownership and governance for several years. They have repeatedly failed to hold an AGM to appoint new board members or agree dividend payments.
Commenting on the new SPK appointments, a TeliaSonera spokesperson said the company was “disappointed that it has come to this”, adding that it wants shareholders to have influence in line with their holdings.
He added that TeliaSonera understands the SPK appointments are just a “temporary and extraordinary measure”.
He declined to comment on when the company expects Turkcell shareholders will be able to appoint their own board members but said TeliaSonera remains “hopeful” that it will happen as soon as possible.
In mid-July, SPK chairman Vahdettin Ertas told the Financial Times (FT) that the ongoing dispute had left the authority with no option but to appoint the two members. SPK also appointed three independent directors in March.
Last month, the three major shareholders all urged SPK not to appoint the new members.
A spokesperson for Altimo, the telecoms investment arm of oligarch Mikhail Fridman’s Alfa Group, said such a move would be “uncalled for” in light of a recent UK Privy Council decision granting Cukurova permission to recover Turkcell shares from Altimo if it pays US$1.56bn. In his view, the court verdict gave “the green light to resolve the [shareholder] deadlock” and clarify their positions “once and for all”.
TeliaSonera also criticised SPK’s plans, with acting CEO Per-Arne Blomquist telling the FT that excluding shareholder-appointed directors from the Turkcell board would send a negative message to foreign investors.
Blomquist was also quoted as saying that any attempts to “nationalise” the Istanbul-based company by appointing a board made up solely of SPK-appointed directors are contrary to both Turkish laws and international treaties.
Turkcell, which is listed in Istanbul and New York, today issued its own statement acknowledging the new board appointments.
