Turkcell Deadlock Set to Continue after Regulator Decision

Date : 06/25/2012 @ 4:36AM
Source : Dow Jones News
Stock : Turkcell Iletisim Hizmetleri As (TKC)
Quote : 10.66  0.57 (5.65%) @ 3:59PM

Turkcell Deadlock Set to Continue after Regulator Decision

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By Sven Grundberg

STOCKHOLM--The boardroom deadlock in Turkey's largest carrier Turkcell Iletisim Hizmetleri AS (TCELL.IS) is set to continue, major shareholder TeliaSonera AB (TLSN.SK) warned Monday, following a decision from Turkey's regulator not to evaluate proposed nominees to Turkcell's board, ahead of the company's extraordinary general meeting.

Turkey's Capital Markets Board, the authority in charge of the securities markets in Turkey, on Friday said that it won't evaluate a list of independent nominees to Turkcell's board of directors, citing the lack of a board resolution regarding the list. Nor will the authority evaluate proposed changes to the Turkish telecom operator's articles of association.

The decision comes ahead of Turkcell's EGM, due to be held on June 29, at which TeliaSonera had hoped to end the boardroom deadlock that has plagued Turkcell for a number of years.

"Without an evaluation from Turkey's Capital Markets Board regarding these issues, there will nothing to decide upon at the EGM," said TeliaSonera spokeswoman Cecila Edstrom, adding:

"If Turkcell's board can't reach a resolution regarding these issues ahead of the shareholders' meeting, the deadlock in Turkcell's board could continue."

TeliaSonera has for several years struggled to gain control over Turkcell, in which it has a 38% stake.

The ownership conflict in Turkcell began when TeliaSonera attempted and ultimately failed in 2005 to purchase the ownership stake held by Turkcell's founder, the controversial Turkish businessman Mehmet Karamehmet and his Cukurova conglomerate.

Turkcell's board has six board members in addition to its chairman, who is able to block decisions. TeliaSonera wants the number of independent board members to increase.

The Swedish carrier hopes that it will be able to replace Turkcell Chairman Colin Williams who, it says, isn't acting as an independent board member, and, together with Russia's Altimo, the telecommunications arm of Russian industrial conglomerate Alfa Group, wrestle control of Turkcell from Cukurova.

At 0752 GMT shares in TeliaSonera traded 0.4% lower at SEK43.09.

Write to Sven Grundberg at sven.grundberg@dowjones.com

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