TeliaSonera reopens Turkcell affair

Swedish-Finnish telecommunications operator TeliaSonera has initiated a new arbitration proceeding against Turkey's Cukurova group for breaching a shareholders' agreement on Turkcell.

TeliaSonera announced in March that it would pay 3.1 billion dollars for 27 percent of Turkcell, taking its total holding to 64.3 percent.

But Cukurova in May declined to sign a final deal with TeliaSonera and said it was looking instead at options that would not change control of the company.

TeliaSonera launched an arbitration proceeding against Cukurova in June, alleging that Cukurova breached the agreement.

Now, TeliaSonera claims that indirect stakes in Turkcell which Cukurova recently transferred to Russia’s Alfa Group should have been offered to TeliaSonera, as it had the right of first refusal.

“The announced transaction between Cukurova and Alfa concerning indirect shareholding interests in Turkcell breaches the shareholders’ agreement between TeliaSonera and Cukurova,” TeliaSonera said in a statement.

As a result it is launching another arbitration proceeding at the International Court of Arbitration of the International Chamber of Commerce.

“The latest developments clearly show that the intention has been to immediately sell indirect shareholding interests in Turkcell without respecting TeliaSonera’s rights,” TeliaSonera chief executive Anders Igel said.

“It is unfortunate that we have to start another legal process around this matter, but we believe it is important to fight for our rigths and for a proper conduct of international business,” he said.

Cukurova Holdings, one of Turkey’s most diverse conglomerates, is still recovering after reaching the brink of bankruptcy during an economic crisis in 2001.

It is currently the biggest shareholder of Turkcell with 42 percent.

The mobile phone operator has some 23 million subscribers and some 5,000 employees.

It is also the first Turkish company to be listed on Wall Street.

TeliaSonera’s coffers are flush and the company has long been looking for international acquisitions.