A court in the UK has ruled that Cukurova has to pay $1.56 billion within 60 days to recover its stake in Turkcell, the country’s largest mobile operator.
Commercial rival Alfa took over the 13.8 per cent stake in the operator when Cukurova, which is a holding company of billionaire Mehmet Karamehmet, defaulted on a loan.
Although only a minority holding, the Turkcell stake gives indirect control of the operator though a complex shareholding and management structure.
The case was being heard in the UK because it involves a Cukurova subsidiary that is incorporated in the British Virgin Islands. The Privy Council is the final court of appeal for many Commonwealth countries.
Karamehmet won the right to recover the stake following a court decision in January, at which time the court said it would decide on the amount he had to pay to regain control.
Meanwhile, the Financial Times reports the Turkish parliament is mulling legislation that would empower the country’s government to appoint directors to the Turkcell board. A vote may happen this week.
The article quotes a lawyer close to a minority shareholder in Turkcell who says the case is showing “the heavy hand” of the Turkish government.
The government is thought to be concerned about Russian group Alfa gaining control over a prime national asset such as Turkcell.
Yet Cukurova, according to Alfa at least, is under financial pressure, which raises concerns whether it can afford to regain control of Turkcell.
A Turkish savings deposit insurance fund has seized a group of Cukurova’s assets because of liabilities that go back some years.