Turkey’s Capital Markets Board (CMB) has picked two new members for the board of Turkcell, in an attempt to end a prolonged dispute at the country’s leading mobile operator.
The move is seen as the Turkish government flexing its muscles in regard to Turkcell, regarded as a key national company.
The operator has been the subject of a slow-grinding dispute between Mehmet Karamehmet, one of Turkey’s richest men, and Russian oligarch Mikhail Fridman.
The dispute has made it impossible for Turkcell to pay a dividend since 2010, as well as agree board appointments. A total of $3 billion in unpaid dividends has built up as a result.
The CMB’s chairman said in July it would appoint the new board members and has now named them as Mehmet Bostan, who heads the pensions fund subsidiary of a state bank, and Bekir Pakdemirli, an official from the country’s ruling AK party.
A new law approved by the Turkish Parliament this month gave the CMB the authority both to name directors and approve a dividend.
However, the growing influence of the Turkish state has concerned other shareholders, including TeliaSonera, which has allied itself with Fridman.
The Nordic operator did however adopt a more conciliatory tone following the CMB’s move, according to one report.
For its part, the CMB said its new appointees would only stay until they were replaced by appointees chosen at a shareholders’ meeting or by the CMB itself.
The CMB said it will ask each of the three largest shareholders in Turkcell – Karamehmet’s Cukurova Holding, Fridman’s Alfa and TeliaSonera – to suggest two directors each, from which it will supply the final two directors (the CMB already appointed three of the seven Turkcell board members earlier this year).
CMB’s tenure might be prolonged after a recent UK court decision. At the end of July the UK’s Privy Council dropped the 60-day deadline imposed on Cukurova Holding to find $1.56 billion to recover its 13.7 per cent stake in Turkcell.