UK judges to decide on Turkcell dispute
29 January 2013 |
The UK Privy Council of judges is set to rule this week on an ongoing dispute regarding control of Turkcell.
Mehmet Karamehmet, among the wealthiest men in Turkey, has gone head to head with Mikhail Fridman, head of Russia’s Alfa Group, over ownership of the company since 2007.
The argument concerns whether Karamehmet’s Cukorova subsidiary defaulted on a $1.4 billion loan from Alfa, enabling Alfa to take control of a 51% stake in Turkcell.
The Privy Council has the final decision on the matter because Cukorova is incorporated in the British Virgin Islands and a ruling will be made tomorrow.
Market watchers believe that no matter the outcome it will be positive for Turkcell, which has been left largely paralysed since the dispute began.
Turkcell has also not paid dividends for three years despite the group having $3.7 billion in gross cash.
This is due to another dispute on the boardroom level pressed by Alfa and its Nordic ally TeliaSonera, which both accuse Colin Williams, Turkcell’s chairman, of being too close to Karamehmet.
Williams has the casting vote on Turkcell’s board but changes have been stalled by new corporate government rules, according to the Financial Times.
The government has also appeared apprehensive about Turkcell falling into foreign hands, although Turkcell and TeliaSonera insist the company will remain Turkish even if they gain control.