Oct. 13 (Bloomberg) -- Turkcell Iletisim Hizmetleri AS, Turkey’s biggest mobile phone company, dropped after shareholders didn’t vote on a dividend from 2010 profit and an attempt by TeliaSonera SA to replace one or more board members was blocked on government objections.
Turkcell declined as much as 2.3 percent to 8.40 liras. It fell 0.5 percent to 8.56 liras at 4:30 p.m. The share rose 4.6 percent yesterday, partly on expectation the dividend would be approved.
“The dispute is likely to continue,” said Erdem Hafizoglu, an analyst at BGC Partners in Istanbul. “The stock trades at a premium to peers, which we don’t find very reasonable even if there was no problem regarding the dividend payments.”
Cukurova Holding AS of Turkey, owned by Mehmet Emin Karamehmet, Turkey’s richest man, is battling with TeliaSonera and Alfa to keep control of Turkcell in wrangling that’s escalated to court cases stretching from Geneva to the British Virgin Islands. Yesterday’s extraordinary shareholders meeting had already been scheduled twice previously.
Proposed changes to the company’s board, backed by TeliaSonera and Alfa Group of Russia at yesterday’s meeting, couldn’t be made after chairman Colin Williams blocked a vote. Government officials at the meeting told Williams the vote would break laws and regulations published on Oct. 11, Turkcell said in a filing.
TeliaSonera and Alfa want Williams replaced, saying his independent status as chairman is compromised by his closeness to Karamehmet. Williams denies the charges.
Turkcell Holding, which owns 51 percent of Turkcell, is 53 percent owned by Cukurova Telecom Holding and 47 percent by TeliaSonera. Alfa owns 49 percent of Cukurova Telecom Holding and Cukurova Holding controls 51 percent.
TeliaSonera is looking forward to working with Turkish authorities to improve corporate governance at Turkcell, spokeswoman Cecilia Edstroem said by telephone yesterday. She said the laws and regulations published by the capital markets regulator on Oct. 11 that require Turkey’s largest companies to appoint more independent board members were “positive,” but Williams had ignored them.
The outlook for Turkcell shares is positive because the new legislation means the deadlock is closer to a conclusion, Vera Sutedja, an analyst at Erste Group Bank AG in Vienna, said by telephone today. In terms of 2012 projected earnings per share Turkcell’s share price is “already attractive,” she said.
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