Putin-Erdoğan agenda includes Turkcell: Report

ISTANBUL - Hürriyet Daily News

This file photo shows a man sitting on a bench next to a Turkcell mascot. The partners of the firm are in an ongoing dispute about the ownership structure.

Russian President Vladimir Putin’s landmark visit to Turkey yesterday was expected to be dominated by economic and business relations between the two countries, which have seen strengthening economic relations in recent years, despite the two parties sharply disagreeing on the Syria conflict.

Turkey’s giant mobile phone operator, Turkcell, was expected to top the list of talks between Putin and Turkish Prime Minister Recep Tayyip Erdoğan, daily Hürriyet columnist Erdal Sağlam said yesterday, citing unnamed sources. The leaders were expected to try to bring the ongoing discord between the partners of Turkcell to an end.

Assigning independent board members

A specific issue that two leaders would talk over is the assignment of three or four independent members to the Turkcell board. The Capital Market Board (SPK) asked Turkcell to assign independent board members in accordance with legislation, a process that needs SPK approval to be finalized. However, Turkcell has not been able to succeed in presenting independent members to the SPK, which has lead the SPK to announce that it will appoint them itself if Turkcell fails to do so by the end of the year.

The main rift between the partners stems from Turkcell Holding, which has a 51 percent stake in Turkcell. Altimo, a subsidiary of Russian investment group Alfa that focuses on wireless and fixed-line telecommunications, has come to own the large part of Turkcell Holding as the latter failed to pay its debt to Altimo on time.

However, this caused the partners take the dispute to a court in London, which is expected to settle the case this month. However, the trial process may be finalized in February or March as the verdict is subject to Queen’s approval.

Turkish businessman Mehmet Emin Karamehmet’s Çukurova Holding has a 3 percent stake in Turkcell. His power at Turkcell is based on his stakes in Turkcell Holding, which is subject to the legal dispute.
Some 33 percent of Turkcell stakes are traded on the bourse, while 13 percent are owned
by Swedish telecoms firm TeliaSonera. Both Altimo and TeliaSonera are against Çukurova and are seeking to prevent it from having a voice in the management of the company, Sağlam said.