October 20, 2010 / 3:58 PM / in 7 years

Turkcell forced to call off board meeting

ISTANBUL (Reuters) - Turkcell, Turkey’s biggest cellphone operator which is involved in a legal dispute over control, on Wednesday canceled an extraordinary board meeting at which it had been expected to change members because a government official failed to appear.

The attendance of an interior ministry inspector is a legal requirement. His failure to appear forced Turkcell to call off the meeting, it said in a filing to the stock exchange.

Last month, Turkcell said the meeting would be held to “remove the board of directors members and the election of new members for a period of three years.”

Turkcell’s controlling shareholder, Cukurova Holding, is locked in legal battles with the two other owners over control of the Istanbul-based company.

Cukurova owns about 14 percent of Turkcell but retains control through a complex ownership structure following a 13 percent stake sale to Russia’s Alfa.

The biggest shareholder is Nordic telecoms operator TeliaSonera with 37 percent, and a 37 percent share is publicly traded in Istanbul and New York. Turkcell is the only Turkish company listed on the New York Stock Exchange.

Ali Bahcuvan, head of the Turkish Shareholders Association, said the failure of a state official to appear made clear the government’s stance on the structure of Turkcell’s board.

“I think it sends a message to Turkcell’s foreign partners,” Bahcuvan told reporters.

TeliaSonera will try to reconvene the extraordinary board meeting at the earliest possible date, said spokeswoman Cecilia Edstrom. That could be in a month.

“We had sought to change the composition of Turkcell’s board to help Turkcell remain its leadership position in Turkey, but this was something unexpected,” she said.

Turkcell shares fell 0.93 percent to 10.60 lira on Wednesday, in line with the main Istanbul bourse’s decline.

Reporting by Evren Ballim, writing by Ayla Jean Yackley; Editing by David Cowell

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