* British court set to rule on Wednesday
* Ruling could strip main Turkish shareholder of stake
* Dispute has hampered Turkcell's growth
(Adds quote, details)
ISTANBUL, Jan 29 Turkey's telecoms watchdog said
on Tuesday it would have to approve any change in control of
Turkcell, the country's biggest mobile phone operator, a day
ahead of a British court ruling which could leave the firm with
no major Turkish shareholder.
The Privy Council will rule on Wednesday in the long-running
shareholder dispute between Mehmet Emin Karamehmet, one of
Turkey's most powerful businessmen, and Altimo, the telecoms arm
of Russian billionaire Mikhail Fridman's Alfa Group.
Should it rule in Altimo's favour, the Russian company could
be awarded Karamehmet's 13.8 percent stake in Turkcell, which
also carries controlling rights through its complex management
structure, stripping Turkcell of a major Turkish stakeholder.
"In the royalty contact signed between our institution and
Turkcell, it says any kind of share transfer resulting in a
change of control requires an approval from our institution,"
Turkish telecoms watchdog BTK said in a statement.
The Privy Council, the highest court of appeal for many
Commonwealth countries, is hearing the case because Karamehmet
holds his stake in Turkcell through his Cukurova
holding company, registered in the British Virgin Islands.
The telecoms watchdog said any ruling by the British court
would not alter the fact that a share transfer would need its
blessing but gave no hint as to what it would do if Cukurova was
stripped of its stake.
The dispute centres around a loan taken in 2005 by Cukurova
from Altimo, which indirectly holds 13.2 percent of Turkcell.
Nordic telecoms group TeliaSonera holds 37 percent of
Turkcell while the remaining 34 percent is largely free float.
Cukurova put its stake in Turkcell up as collateral for the
loan and the argument hinges on whether that loan fell into
default. Altimo says Cukurova failed to pay in time, while
Cukurova maintains Altimo blocked its repayment.
The dispute has left Turkcell unable to agree on the
composition of its board for the past two years, and unable to
distribute dividends or pursue a coherent growth strategy.
(Reporting by Asli Kandemir; Writing by Nick Tattersall)