By Emre Peker
ISTANBUL--Turkey's Cukurova Holding AS must pay more than $1
billion in damages and interest to Sweden's TeliaSonera AB, a U.K.
court said Tuesday, dismissing the Istanbul-based firm's appeal as
it grapples to re-establish its control at Turkcell Iletisim
Hizmetleri AS, the biggest Turkish mobile-phone operator.
Turkcell shares plummeted 2.4% to TRY12.1 after the decision
amid signs that a swift resolution to legal battles for boardroom
control and resumption of dividend payments may become more
difficult.
The judgement from the U.K. Privy Council, an appeals court
based in London, follows an April 25 decision in a U.S. appeals
court. Judges in New York overturned a TeliaSonera bid to freeze
Cukurova assets, starting a 60-day deadline for Turkish billionaire
Mehmet Emin Karamehmet to reclaim a 13.8% stake in a holding
company from Russia's Alfa Group that would re-establish his hold
over Turkcell. Cukurova owes $1.6 billion to Alfa.
"Adding another $1 billion in payments to TeliaSonera on top of
the $1.6 billion due to Alfa to regain a controlling stake will
raise questions about how Cukurova will secure financing, and that
will pressure the shares," said Halil Ibrahim Kahve, an analyst at
Garanti Securities in Istanbul. "Turkcell shareholders are waiting
for a dividend, and for that the partners need to resolve their
issues."
A spokeswoman for Istanbul-based Turkcell declined to
comment.
"Our top priority is to get ordinary corporate governance in
place in Turkcell. Among other things this means representation on
the board for the shareholders, the holding of an annual general
meeting, and a decision on distribution of dividends," TeliaSonera
said in a statement.
--Yeliz Candemir and Sven Grundberg contributed to this
article
Write to Emre Peker at emre.peker@dowjones.com
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