Sweden’s TeliaSonera has said it has secured a victory over Cukurova Holding in the long-running dispute over Turkcell’s ownership, saying the Eastern Caribbean Supreme Court has ruled in its favour.
The court has imposed restrictions upon Cukurova…
Sweden’s TeliaSonera has said it has secured a victory over Cukurova Holding in the long-running dispute over Turkcell’s ownership, saying the Eastern Caribbean Supreme Court has ruled in its favour.
The court has imposed restrictions upon Cukurova Holding’s locally-registered units – including majority-owned subsidiary Cukurova Telecom Holdings via which it owns its controlling stake in Turkcell – the Swedish telco said.
The dispute began in 2005, when Cukurova, owned by Turkcell co-founder Mehmet Emin Karamehmet, backed out of an agreement to sell its stake in the Turkish mobile operator to TeliaSonera for US$3.1bn.
In September 2011, the Paris-based International Chamber of Commerce awarded the Swedish telco US$932m in damages plus interest, but the company has said it has not received the money.
Cukurova went on to sell Turkcell shares to Russia’s Altimo in exchange for a loan, upon which it subsequently defaulted. In late January this year, the UK’s Privy Council ruled Altimo was justified in taking back the stake, but said Cukurova could recover it if it paid the outstanding loan plus interest. The court is expected to make a decision on the exact amount Cukurova should pay very shortly.
Cukurova was not immediately available for comment.
Turckcell is listed in Istanbul and New York.
Regulator appoints members to Turkcell board
Reacting to the ongoing ownership dispute, the Turkish Capital Markets Board today appointed three independent members to the Turkcell board because of the operator’s failure to satisfy corporate governance regulations.
According to TeliaSonera the new independent board members replace representatives of the major shareholders: Cukurova’s Mehmet Bulent Ergin, TeliaSonera’s Tero Kivisaari and Altimo’s Oleg Malis.
The new CMB-appointed members are Ahmet Akca, Atilla Koc and Mehmet Hilmi Guler. They will remain on the board until Turkcell appoints its own independent board members in accordance with CMB regulations.
The CMB has also directed Turkcell to alter its articles of association to comply with new regulations on board representation.
Turkcell has been in corporate governance gridlock as a result of its major shareholders’ ongoing ownership dispute.
The mobile operator was forced to postpone its AGM in June last year, at which issues such as increasing independent representation on the board and amending company articles was set to be discussed, because Turkcell Holding was not represented. As reported at the time, Cukurova and Altimo did not agree on a person to represent Turkcell Holding at the meeting.
Both Altimo and TeliaSonera blamed Cukurova for the stalemate.
TeliaSonera today issued a statement welcoming the CMB’s decision to appoint independent board members, given that its own “efforts to resolve the deadlock at the Turkcell board have failed”.
“We see the CMB initiative as a step towards fair corporate governance and efficient management that will enable Turkcell to grow its local and regional leadership,” CEO Per-Arne Blomquist said.
