Turkcell dispute deepens, shareholders look to goernment

ISTANBUL- Hürriyet Daily News

Turkcell’s shareholders meeting was cancelled June 29 as foreign investors blame Çukurova Holding, the founding partner in Turkey’s largest mobile operator. DAILY NEWS photo, Hasan ALTINIŞIK

The power dispute at Turkcell, Turkey’s largest mobile phone operator, deepened with the cancellation of a long-postponed shareholder meeting June 29, as foreign investors in the company blamed Çukurova Holding, the founding partner, which holds a 14 percent stake in the company.

Minority shareholders have called for government intervention, following a similar statement from a cabinet minister issued June 27.

Turkcell was warned by the Turkish Capital Markets Board (SPK) regulator last week over its failure to comply with new rules raising the number of independent members required on boards to at least three.

Altimo said in a press release June 29 that Çukurova has blocked the new board members.

The Russian company expects more support from the Turkish government, Altimo Vice President Evgeni Dumalkin said June 29 in a response to emailed questions from the Hürriyet Daily News questions.

“I think the SPK has improved [the] corporate governance environment [by] issuing their communiqués. We support them. From that perspective we are grateful to the Turkish government,” Dumalkin said. “We, as [the] biggest Russian investors in Turkey, hope that the government will further support the rights of foreign investors in this bitter conflict with a local shareholder that has cheated its partners.”
Turkish Transport and Communications Minister Binali Yıldırım signaled on June 27 that the government may intervene in the Turkcell conflict if the shareholder dispute continues, telling Reuters he would pursue the public interest. However, Altimo would not welcome such an intervention. “We are sure that this is purely shareholders’ dispute and we as shareholders guarantee that it will in no way reflect on Turkcell operational activity,” Dumalkin told the Daily News.

Court case may be opened
The Turkish Shareholders Association, which represents minority investors, says they may open a court case if the dispute drags on further.

“We have not received dividend payments for two years. We are missing investment opportunities abroad. If problems continue we may open a court case,” Ali Bahçuvan, the head of the shareholders association, told Reuters.

Turkcell said June 29 the annual meeting could not convene because the quorum required by Turkcell’s articles of association had not been reached. Turkcell Holding, which owns 51 percent of the company, was not represented at the meeting. Behind the cancellation was the failure of shareholders Altimo, the telecommunications arm of Russia’s Alfa Group and Çukurova to settle a dispute over the board’s composition.

“It is clear that had the shareholders been allowed to vote, new board members would have been elected and the articles amended,” said Dumalkin in an e-mailed statement. Çukurova said most of the candidates proposed by Altimo and TeliaSonera for the independent board member position failed to meet SPK criteria.

Ali Kayalar from Istanbul contributed to this report