Turkcell warned over independent board member list

ISTANBUL, June 22 (Reuters) - Turkcell, Turkey's largest mobile phone operator, has been warned by the Capital Markets Board over its failure to comply with new rules raising the number of independent members required on boards to at least three.

The failure further complicates efforts to break a deadlock between major shareholders over control of the company.

The regulator said in its weekly bulletin on Friday it could not accept Turkcell's independent member list as it was not agreed by the board, which is riven by divisions between shareholders.

The market regulator said Turkcell should apply to the Capital Markets Board immediately with an independent member list which complied with the rules.

Nordic telecoms group TeliaSonera has the largest direct and indirect stake in Turkcell, with a 37 percent share, while Altimo, the telecoms arm of Russian group Alfa, has an indirect stake of 13.22 percent.

Turkish group Cukurova has a 14 percent stake which carries controlling rights because of the management structure.

TeliaSonera and Altimo are locked in legal battles to wrest control of Turkcell from Cukurova, chaired by Mehmet Emin Karamehmet, one of Turkey's most powerful businessmen.

Having forced Karamehmet to step down as Turkcell chairman in 2010, the Nordic and Russian partners are pushing to oust his replacement, Colin Williams, a designated independent board member, who they regard as a proxy for Karamehmet.

The unresolved issues over restructuring of the board could leave decision-making paralysed.

"The complicated Turkcell case still maintains its mystery ... Unfortunately, Turkcell's board of directors cannot convene due to severe conflicts among shareholders. Nonetheless, auditors had invited for an ordinary general meeting on June 29, 2012," analysts at Tera Brokers said in a note.

Turkcell failed to hold key votes on board changes and its dividend at an extraordinary general meeting in October.

A decision by the Capital Markets Board on the eve of the EGM set new rules raising the number of independent members required on company boards to at least three.

Turkcell has yet to comply with that regulation. Currently, the three main shareholders each have two seats on Turkcell's seven-member board. (Writing by Seda Sezer; Editing by Dan Lalor)