Shareholders of Turkish mobile operator Turkcell have hit out at the company’s ongoing corporate governance gridlock, after today’s planned AGM was postponed.
Turkcell was due to hold a meeting today to discuss issues including increasing…
Shareholders of Turkish mobile operator Turkcell have hit out at the company’s ongoing corporate governance gridlock, after today’s planned AGM was postponed.
Turkcell was due to hold a meeting today to discuss issues including increasing independent board representation, and distributing 2010 and 2011 dividends.
However, the company said the event could not be convened because “the quorum required by the articles of association of Turkcell has not been reached as Turkcell Holding, which owns a 51% stake in our company, was not represented at the meeting”.
Turkcell Holding is 53%-owned by local investment firm Cukurova Telecom Holdings, which is itself 51%-controlled by Turkcell co-founder Mehmet Emin Karamehmet, and 49%-owned by Altimo, a unit of Russian investment firm Alfa Group.
The mobile operator’s general assembly failed to take place because Altimo and Cukurova did not agree on the identity of a person to represent Turkcell Holding at the meeting.
As a result, the shareholders were unable to appoint independent directors to the operator’s board, as recently required by the Capital Markets Board of Turkey (CMB). Turkcell, which has not successfully completed a shareholders’ meeting since 2010, was also unable to decide how to distribute dividends for 2010 and 2011.
“Altimo has always supported the type of corporate governance proposals envisaged by the CMB,” said a spokesman for Altimo.
“It is clear that, had the shareholders been allowed to vote, new board members would have been elected and the articles amended.”
A spokeswoman for Swedish mobile operator TeliaSonera, which owns the remaining 49% stake in the Turkcell mobile operator, said: “We regret these developments and believe that increasing the number of independent board members to four out of ten members would significantly improve corporate governance in Turkcell, fully in line with CMB’s requirements.”
Both TeliaSonera and Altimo blamed Cukurova for the stalemate. Cukurova did not respond to requests for comment before the press deadline.
The TeliaSonera spokeswoman continued: “By increasing the number of independent board members to four out of ten and applying a simple majority, Cukurova acting alone would no longer be able to block majority decisions at the board.”
Turkcell was unable to offer a time frame for any future AGM, because the decision lies with court processes and not with its board.
