Court in Ukraine orders confiscation of Turkcell subsidiaries due to connections with Elite Oligarch Fridman
Turkcell (TCELL) said on March 8 that a Ukrainian court made a ruling to confiscate a 20% share in lifecell LLC, as well as full ownership of Ukrtower LLC and Paycell LLC, due to concerns surrounding the involvement of Russian oligarch Mikhail Fridman. According to TCELL, the court ordered the seizure over worries about the oligarch’s connections.
Turkcell And Fridman
The units of Turkcell, which is under the control of Turkey’s sovereign wealth fund (TWF/TVF), are the companies in question. However, Turkcell has clarified that Fridman does not hold any controlling or influential power over its Ukrainian business. As of now, the court decision has not greatly affected the daily functioning of the subsidiary companies.
On March 7, Turkcell submitted an appeal to retract the court’s order.
In December, the top mobile operator in Turkey, Turkcell, announced that it had reached a deal with NJJ Capital, a French company owned by Xavier Niel, to sell its entire ownership of lifecell, Ukrtower, and Global Bilgi LLC for a total of $525 million. This agreement was confirmed by Turkcell in a statement released on their website, while the details of the deal were also disclosed in a notification to the Istanbul Stock Exchange.
Turkcell has stated that the process of meeting requirements for the completion of the sale of lifecell is ongoing, and they have also mentioned the lifting of the ruling as part of this process.
Fridman has encountered various obstacles due to sanctions related to the Ukraine war. In a March interview with Bloomberg last year, he warned that these sanctions have minimal impact on Vladimir Putin and that although the Russian government is heavily involved with oligarchs tied to the state, they have little connection to the new wave of billionaires who amassed their wealth in the prosperous years of the 2000s through ventures such as retail and online commerce.
The current state of Turkcell is that TVF, under the leadership of President Recep Tayyip Erdogan, maintains control with a 26% ownership stake, which grants them 58% of the voting rights through their privileged shares. IMTIS Holdings S.a.r.l., owned by Fridman, holds a 20% stake in the company.
The company Turkcell, established in 1993, has faced ongoing shareholder conflicts throughout its extensive history. In 2005, Fridman became a stakeholder in the company.
In November, lifecell had a total of 11 million subscribers, accounting for 17% of the market share in Ukraine. It is the smallest among the three mobile operators in the country, which has been affected by war.
Turkcell has raised its ownership in lifecell, which was established in 2005, to 100% in the year 2015.
The news outlet, Meduza, published an article in January revealing that Fridman had initiated a lawsuit against the Ukrainian government. He is seeking $1bn in compensation through the International Centre for Settlement of Investment Disputes (ICSID) for the nationalization of his Ukrainian bank, previously known as Alfa-Bank Ukraine.
Source : https://www.intellinews.com/
