Turkcell major shareholders have urged Turkey’s Capital Markets Board (CMB) not to go ahead with plans to appoint two more directors to the mobile operator’s board – a move that would give the regulator a majority membership.
CMB chairman…
Turkcell major shareholders have urged Turkey’s Capital Markets Board (CMB) not to go ahead with plans to appoint two more directors to the mobile operator’s board – a move that would give the regulator a majority membership.
CMB chairman Vahdettin Ertas told the Financial Times that the ongoing dispute among Turkcell’s three major shareholders – Russia’s Altimo, Turkey’s Cukurova and Sweden’s TeliaSonera – had left the authority with little option to appoint an extra two directors to the seven-member board. In March, the CMB appointed three independent directors because of the dispute.
Commenting on the news, a spokesperson for Altimo, the telecoms investment arm of Mikhail Fridman’s Alfa Group, said the CMB’s plans are uncalled for in light of the recent UK Privy Council decision granting Cukurova permission to recover Turkcell shares from Altimo provided it pays US$1.56bn plus interest.
“As the [Privy Council] verdict is final and gives the green light to resolve the deadlock, we urge the government not to rush with changes to the board,” he said.
The spokesperson described the regulator’s plans to appoint extra board members as “onerous” given that the shareholders’ status is soon to be clarified “once and for all”.
Once this happens, he said “shareholders will do their best to establish an efficient and transparent corporate governance in full accordance with the Turkish legislation.”
TeliaSonera has also criticised the CMB’s plans, with 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 CMB-appointed directors are contrary to both Turkish laws and international treaties.
Ertas told the FT that he was considering appointing the new directors within the 60 days the Privy Council has given Cukurova, controlled by Turkish tycoon Mehmet Emin, to recover the Turkcell shares from Altimo.
Noting that Turkcell has been unable to hold a general assembly, Ertas said CMB-appointed directors would only remain on the board until shareholders agreed replacements.
Ertas was quoted as saying that if the regulator had intended to take control of the company, it would have asked directors to retain their roles for two or three years. He reportedly added that, if the CMB did not use its powers, Turkcell shareholders could apply to the nation’s commercial court for the operator’s dissolution.
Turkcell has declined to comment on the matter and Cukurova was not immediately available.
Turkcell’s trio of major shareholders have disputed the ownership and governance of the company, listed in Istanbul and New York, for several years. The CMB has repeatedly requested that Turkcell increase the number of independent directors on the board, but shareholders have repeatedly failed to do so. TeliaSonera has argued that attempts to increase the number of independent directors have been blocked by Cukurova via subsidiary Cukurova Telekom Holding. The Swedish telco has described the holding as a “structure put in place to enable a minority shareholder to block majority decisions”.
