Turkish Stock Market Regulator Forces New Directors Onto Turkcell Board
Three of Turkcell's directors have been sacked by the local stock market and replacements named after the company failed to nominate its own independent directors as required by stock market regulations.
The Capital Markets Board of Turkey (CMB) announced that it has ceased the duties of Mehmet Bülent Ergin, Tero Kivisaari and Oleg Malis and replaced them by three independent board members of its discretion due to Turkcell's failure at complying with the corporate governance regulations.
The independent board members appointed by the CMB are Ahmet Akça, Atilla Koç and Mehmet Hilmi Güler. The term of duty of the CMB appointees is until Turkcell duly appoints its own set of independent board members as described under the CMB regulations. The CMB also instructed Turkcell to change its articles of association to comply with the new regulations.
"As TeliaSonera's efforts to resolve the deadlock at the Turkcell Board have failed, we welcome the decision by CMB to settle the matter by appointing three independent board members. We see the CMB initiative as a step towards fair corporate governance and efficient management that will enable Turkcell to grow its local and regional leadership," says Per-Arne Blomquist, President and CEO of TeliaSonera.
"We will now focus on the actions needed to convene an AGM at the earliest possible time, where the shareholders can approve changes to the articles of association, new board members be elected to fairly reflect the ownership in the company and financial accounts approved so that the company can start paying dividends again, which are long overdue," Per-Arne Blomquist continues.
The CMB has repeatedly requested that Turkcell should increase the number of independent directors on the Board and has also implemented regulations, applicable to all Turkish listed companies, to that effect.
These requests have been supported by TeliaSonera, which has argued that the number of independent board members has to increase, in order to improve corporate governance and follow requirements by the CMB and the U.S. Securities and Exchange Commission.
However, any attempts to increase the number of independent directors have been effectively blocked by Cukurova exercising its veto right through Cukurova Telekom Holding.
The impasse has also resulted in Turkcell being unable to pay any dividends to its shareholders.