Mixed Verdict in Turkcell Shareholders Dispute
Published on: 30th Jan 2013
Note -- this news article is more than a year old.
By: Ian Mansfield
One of the UK's highest courts has ruled that Russia's Altimo was right in seizing shares in the Turkish mobile network Turkcell when a loan secured on those shares was not repaid.
Cukurova had tried to argue that its attempts to repay the loan were blocked by Altimo, but the court upheld the opinion that Cukurova was late in its repayments, and Altimo was entitled to exercise its right to seize the shares offered as security for the loan.
However the court also ruled that the Turkish debtor, Cukurova is to be given time to repay the loan by other means, so if it is able to raise the necessary USD1.35 billion it may be able to retain control of the mobile network.
The Judicial Committee of the Privy Council has reserved a final judgement until the two sides have met to try and settle that last issue.
The appeal was held by the UK's Privy Council as it is the highest court of appeal for issues originating the British Virgin Islands. The BVI was only involved as the location for the deal after Cukurova shifted its shares in Turkcell Holding to the country to avoid an unrelated issue when TeliaSonera sought to enforce its own put-option to buy the shares.
TeliaSonera lost a later legal action to enforce its rights to the shares, leaving open the opportunity for Altimo to take them when Cukurova defaulted on its debts.
The court has not set a date for its final ruling once the two sides meet to discuss repayment of the loan.