Management clash threatens Turkish cellular network

ISTANBUL (Reuters) – Shares in leading Turkish mobile phone company Turkcell could come under fresh pressure if a year-old management conflict continues far beyond the company’s rescheduled general meeting this month. But analysts said the shares, which have been held back by the row, do not face a major near-term risk because operating fundamentals are strong and with a market share of 63 percent, there is little immediate threat from its two domestic rivals. The dispute came to a head last week when Turkcell Iletisim postponed its annual general meeting (AGM) as shareholders could not decide who would represent majority shareholder Turkcell Holding on the executive board of Turkcell Iletisim. «Turkcell’s share price has underperformed in recent weeks with rising strategic shareholder tensions culminating in the AGM’s postponement,» said Merrill Lynch’s Stephen Pettyfer. So far this year, shares in Turkcell have risen 5 percent, compared with an 11 percent rise in the main share index of the Istanbul market. Given the underperformance, Merrill upgraded its opinion to «neutral» but said corporate governance remained a major risk.