Turkcell fails to convene general assembly due to low quorum

ISTANBUL

The annual general meeting of the leading Turkish mobile phone company Turkcell failed to convene on May 29, as there has yet to be a settlement amid a long-running dispute between the company’s main shareholders, company officials said.

The row between Turkey’s Çukurova, Russia’s Altimo and Nordic telecoms giant Telia Sonera has restrained Turkcell’s development for years because it has been unable to agree on the make-up of its board or pay dividends.

The company had said in March that it was expected to meet to handle a number of issues, including the distribution of shareholder dividends, hold a discussion of four-year operation reports and the acquittal of board members.

The three-partnered company was unable to convene its 2010, 2011 and 2012 General Assemblies, recording six failed meeting attempts in a row over the past four years.

History of long-running dispute

Çukurova had reached an initial agreement in 2005 to sell its 52.91 percent stake in Turkcell Holding, which has a controlling stake in Turkcell, to TeliaSonera.

But the deal was never executed and the shares were not transferred, prompting TeliaSonera to turn to the International Chamber of Commerce in Geneva, which ordered Çukurova to pay $932 million in damages.

Pursuing its legal efforts, TeliaSonera last year secured an order freezing Çukurova’s assets until it paid the damages, though that order was overturned by a U.S. appellate court in April.

The ruling cleared the way for Çukurova to try to buy back a controlling stake in the mobile phone operator, as it was ordered to pay approximately $1.6 billion to Altimo in a separate legal battle.

The ownership dispute is further complicated by a separate but related case involving fellow Turkcell shareholder Altimo, an arm of Russian oligarch Mikhail Fridman’s Alfa Group.

Instead of selling to TeliaSonera, Çukurova took out a loan from Altimo and secured against its Turkcell stake. It then defaulted on the loan, prompting Altimo to appropriate the holding.