The Capital Markets Authority of Turkey (CMA) has rebuked Turkcell over its list of independent board members and told the mobile operator to immediately supply a new list which complies with a recently-introduced requirement for boards to have at least…
The Capital Markets Authority of Turkey (CMA) has rebuked Turkcell over its list of independent board members and told the mobile operator to immediately supply a new list which complies with a recently-introduced requirement for boards to have at least three independent members.
In its latest weekly bulletin, the authority said it could also not accept Turkcell’s independent member list on the grounds that it has not been agreed to by the company’s board.
The operator’s three major shareholders – Cukurova Holding, owned by Turkcell co-founder Mehmet Emin Karamehmet, Sweden’s TeliaSonera and Altimo, a unit of Russian investment firm Alfa Group – have disputed the company’s ownership and governance for years.
The three shareholders each have two seats on Turkcell’s seven-member board but, as five votes are needed to carry decisions, many have been blocked. At an extraordinary general meeting in October last year, the company failed to hold votes on both board changes and its dividend.
On 1 June, Turkcell issued a statement saying its statutory auditors have called an annual general assembly for the company on 29 June “on the basis that the board of directors has not timely and properly carried out the required procedures for the implementation of Corporate Governance Principles issued by the Capital Markets Board (CMB) and could not adopt a resolution at the annual general assembly”.
The CMB raised the number of independent members large companies must have from two to three the day before Turkcell’s October meeting and has since extended the requirement to all listed companies. Those affected must meet the new requirement before the end of June, at which point a whole range of new auditing rules are also set to come into force.
Turkcell’s ownership structure is complex: Cukurova Telecom Holdings owns 53% of Turkcell Holding which, in turn, owns 51% of Turkcell Iletisim (the mobile operator). TeliaSonera owns the remaining stake in Turkcell Iletisim. Meanwhile, Alfa owns 49% of Cukurova Telecom Holdings and Cukurova Holding controls 51%.
Founded in 1994, Turkcell is now the nation’s largest mobile operator with 34.4 million subscribers as at 30 September 2011.
