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UK court decides on Turkcell shares
31 January 2013
Solution to dispute appears near as UK court decides between rival shareholders in Turkcell
Turkish holding company Çukurova seems likely to regain
control of Turkcell from Russia's Alfa group after a decision
by an obscure UK court.
Alfa took control of Çukurova's holding in Turkcell in
2007 after Çukurova defaulted on a loan of $1.44
billion. The action did not affect TeliaSonera's minority stake
in the company, though TeliaSonera took Alfa's side in the
The deal was done through a Turkcell subsidiary registered in
the UK-controlled British Virgin Islands, so the parties took
the dispute to the Judicial Committee of the UK's Privy
Council, which is the supreme court for a number of the UK's
existing and former possessions.
The court accepted that Çukurova, a holding company
controlled Turkish businessman Mehmet Emin Keremehmet, had
defaulted but said that Alfa should have allowed the company to
regain control on repayment of the debt.
The court has not yet finished with the case, as it needs to
set the compensation that Çukurova should pay to Alfa to
repay the debt. And Turkey's telecoms regulator has said that
it has the right to decide on the shareholding.
Turkcell shares are traded on New York's Nasdaq.
Çukurova's holding is through a chain of companies,
including Çukurova Telecom Holdings and Turkcell
Holding. Çukurova Telecom Holdings is 51% owned by
Çukurova Finance International and 49% by Alfa Telecom.
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