Turkcell meeting not held amid shareholder dispute, shares fall

ISTANBUL - Reuters

The Turkish mobile phone company Turkcell failed to hold an annual general meeting today for the sixth time after already postponing it previously due to a long-running dispute between major shareholders, sending its shares down 2.75 percent.

Turkcell canceled the meeting last month because a dispute between Turkey’s Çukurova and Russia’s Altimo Group prevented the approval of accounts and distribution of dividends. Çukurova is also in a dispute with the third and major stakeholder of the company, Nordic telecommunications giant TeliaSonera.

As Turkey’s telecommunications giant has been stuck between its three owners in managerial deadlock, the Capital Markets Board (SPK) has said it will appoint two more independent board members to the company to maintain a minimum-five-member structure.

The regulator had set on May 24 a 30-day deadline for the company to resolve its issue by holding a general assembly to set the terms for distributing dividends to shareholders, which it failed to hold today.

“We believe the SPK will find an appropriate solution,” the senior vice president and head of group communications of TeliaSonera, Cecilia Edström, told the press after the meeting.

“We worked very hard on the consensus. However, it’s not an issue that we can solve on our own,” she said, adding that it was important for the Nordic company that the solution be fair and in line with the shares of stakeholders.

The SPK appointed three independent members including two former ministers to the board in an earlier move that sector analysts said could be perceived as an example of government interference in the private sector.

A law sent to Parliament last week includes the empowerment of the SPK to appoint board members for companies traded on the stock exchange.

Turkcell is at the center of a legal battle for control between its partners; Çukurova Holding, TeliaSonera and Altimo. The dispute has left Turkcell unable to agree on the composition of its board and unable to distribute its dividends.

TeliaSonera has the largest direct and indirect stake in Turkcell, amounting to 37 percent, but Turkish Çukurova controls Turkcell through a complex shareholder structure.

TeliaSonera’s dispute with Çukurova dates back to 2005, when the Nordic group agreed to buy Çukurova’s stake in Turkcell for $3.1 billion.