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A UK court ruled on January 30 that Turkey's Cukurova is entitled to have the opportunity to redeem its 13.7% stake in Turkcell from Russian telecommunications firm Altimo after the shares were appropriated due to a defaulted loan. The ruling looks likely to extend the long-running shareholder stand-off at the Turkish telecom operator.

The UK Privy Council - the final court for many Commonwealth countries and hearing the case due to Cukurova's registration in the British Virgin Islands - ruled that Altimo had been entitled to accelerate the $1.35bn loan and appropriate the shares, but that "relief against forfeiture should be available to (Cukurova) on appropriate conditions," reports Reuters. In short, that means Cukurova should have the opportunity to redeem its Turkcell shares.

The court added that the Turkish holding must be given the chance to buy back the shares "on appropriate conditions," but said it needs more information from the parties before it can make a final decision on "the basis and terms of such relief."

Sweden's TeliaSonera - the biggest shareholder in Turkcell with 38% - and Altimo, the telecom arm of Russian oligarch Mikhail Fridman's Alfa Group, have battled Cukurova over control of Turkcell for years. Alfa bought 13.2% of Turkcell for $1.6bn from Cukurova and lent it another $1.7bn in 2005 as the Turkish holding struggled to pay off debt to the Turkish state. The 13.7% stake was collateral for the loan, and was appropriated. The remaining 34% or so of Turkcell is free float.

Both Cukurova and Altimo claimed to be satisfied with the ruling, but the Turkish shareholder is likely to be the happiest, as it overturned a previous ruling that Altimo should be allowed to retain the stake. The use of loans as leverage to get his hands on control of a company is a favourite tactic of Fridman, who has regularly used his influence in the Russian corridors of power in Altimo's long-running struggle with TeliaSonera's Nordic peer Telenor over control of VimpelCom - one of Russia's biggest mobile operators.

John Reynolds, a partner at White & Case, which represented Cukurova, said in a statement: "In reaching its decision, the court found that Alfa was primarily concerned with the shares not as security for its loan but for the control over Turkcell that they would provide." Meanwhile, Altimo Vice President Evgeny Dumalkin said: "(We) look forward to final completion of the dispute which has been damaging to Turkcell for a long time."

Until those claims of victory are given the final test by the conditions of redemption that should apply then, the main losers continue to be shareholders in the free float, who have missed out on dividends through the drawnout boardroom fight. As Bloomberg reports, Turkcell shares fell 3.4% to TRY11.45 - their lowest this year - in Istanbul trading on the news on January 30.

"We would expect the shareholder dispute to continue as before and the dividend might be further delayed," suggest analysts at Erste Bank. "Although this might sound negative, we have known of this situation for some years. Turkcell [has been] well managed throughout the dispute and could even post its best growth ever in 2012. Underlying operational performance is strong and the growth potential in the domestic market remains intact. We expect shares to be under pressure in the short term."