Turkcell saga has another twist in the tail; British Privy Council quash costly Caribbean ruling

Mehmet Emin Karamehmet, owner of Turkey’s Cukurova Holding, has regained the upper hand in his tug-of-war with Altimo, the telecoms arm of Russian conglomerate Alfa Group, over control of Turkcell, Reuters reports. Britain’s Privy Council – the highest court of appeal for many Commonwealth countries – has reportedly quashed a previous order for Cukurova to deposit USD1.45 billion, pending the outcome of its dispute with Altimo. Altimo had hoped to be awarded Cukurova’s 13.8% stake in Turkcell if the funds were not deposited by the 5 March deadline. The original decision was made by the Eastern Caribbean Supreme Court in July 2011. ‘As a result of this new ruling, Cukurova’s transfer of shares to Altimo will not take place at this stage’, Mustafa Kiral, Altimo’s vice-president responsible for European mergers and acquisitions, said on Friday.

TeleGeography notes that the ongoing ownership issues relating to Turkcell date back to 2005, when Cukurova Holding reneged on an exclusivity agreement with TeliaSonera to offer shares to Alfa for a higher price – a deal which was later annulled. Subsequent years have seen the dispute rumble on, with legal appeals and counter appeals muddying the waters. According to TeleGeography’s GlobalComms Database, Turkcell is owned by Turkcell Holding (51.00%), Sonera Holding (part of Sweden’s TeliaSonera, 13.07%), MV Group (2.32%), Cukurova Holding (0.05%) and others (0.01%), with the remaining 33.55% publicly traded on the New York and Istanbul Stock Exchanges. Turkcell Holding is itself owned by TeliaSonera (47.09%, giving it a 37.09% overall stake) and Cukurova Holding (52.91%, for a 26.98% overall interest). Altimo/Alfa secured its indirect stake in Turkcell in November 2009 when TeliaSonera and Alfa Group agreed to combine their respective holdings in Turkcell and MegaFon of Russia (in which the Swedish firm owns 43.8% and Alfa owns 25.1%).