UPDATE 1-Turkcell fails again to hold AGM amid shareholder row

Mon Jun 24, 2013 7:14am EDT

(Adds TeliaSonera comment, background)

ISTANBUL/STOCKHOLM, June 24 (Reuters) - Turkish mobile operator Turkcell again failed to hold an annual general meeting on Monday due to a long-running dispute between major shareholders, prompting a rebuke from its biggest owner.

Turkcell had already cancelled one meeting in May because a dispute between Turkey's Cukurova and Russia's Altimo Group stopped them from appointing a representative for a joint shareholding.

Nordic telecoms group TeliaSonera, Turkcell's biggest shareholder with 38 percent, lashed out at the failure to hold the meeting, saying it was very disappointed and that a solution to the ownership disputes was long overdue.

"We are not happy with the current structure, where a minority shareholder can block majority decision due to a complex holding company structure," Teliasonera Chief Executive Per-Arne Blomquist said in a statement.

The deadlock has left Turkey's biggest mobile operator unable to agree the composition of its board, preventing the approval of accounts and distribution of dividends as well as the pursuing of a coherent growth strategy.

The row centres on Cukurova Holding's 13.8 percent stake in Turkcell, which is a controlling stake due to the structure of its shareholders. Altimo and Cukurova share ownership of the holding company behind the listed Turkcell business.

Altimo has 13.2 percent in Turkcell which it seized from Cukurova after the latter defaulted on a loan eight years ago.

Following a warning last month from the Turkish government that it may "intervene" unless shareholders agree on the make-up of the board, TeliaSonera on Monday urged the market watchdog CMB to come up with a fair solution.

"I would like to emphasise that this is a conflict between private companies, and should be dealt with as such and through legal procedures," Blomquist said.

"Therefore, any attempts to "nationalise" the company, by excluding TeliaSonera from the board and appointing a board which solely consists of CMB appointed members, are unacceptable," he said.

Teliasonera is involved in a separate battle with Cukurova, having agreed to buy the disputed stake before Cukurova backed out and refused to pay court-imposed damages.

Turkcell's shares were down 3.2 percent at 1040 GMT. (Writing by Ece Toksabay and Anna Ringstrom; Editing by Alistair Scrutton)

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