Bank GM blasts watchdog’s silence over money laundering claims

A recent crackdown on Turkey’s largest Islamic lender, Bank Asya, continues to fuel uncertainty in the economy, with several foreign-owned banks withdrawing from the country and prominent domestic firms postponing their planned public offerings due to unfavorable market conditions. Turkey’s banking watchdog took control of the management rights of 63 percent of Bank Asya’s privileged shareholders, who have right to nominate board members, early in Februa

A recent crackdown on Turkeyand#39s largest Islamic lender, Bank Asya, continues to fuel uncertainty in the economy, with several foreign-owned banks withdrawing from the country and prominent domestic firms postponing their planned public offerings due to unfavorable market conditions.

Turkeyand#39s banking watchdog took control of the management rights of 63 percent of Bank Asyaand#39s privileged shareholders, who have right to nominate board members, early in February in yet another example of the governmentand#39s oppression of dissenting voices in the country.

Alongside other factors, however, the decision has contributed even more to existing uncertainty in the market, with the lira in free fall against the US dollar and hitting record lows on multiple occasions recently.

While the external debt of private firms has been steadily rising amid the strengthening dollar, the Turkish market seems to have lost its attractiveness for investors, since several companies have taken a relatively more cautious stance before making strategic decisions compared to periods when the dollar had been valued below TL 2

Last week, Finansbank, the Turkish unit of the National Bank of Greece (NBG), announced that it had postponed a planned share offering to a later time and that it would complete the offering if market conditions are suitable, implying that current circumstances bar their planned offering.

In January the public offering of state-owned defense contractor Turkish Aerospace Industries (TAI) was delayed indefinitely due to fluctuations in financial markets.

The offering had been planned to take place in February.

In the meantime, one of Turkeyand#39s largest oil distributors, the Turkish Petroleum Refineries Corporation (TandUumlPRAI), has recently deferred the floating of TL 75 million in shares, citing fluctuating market conditions.

Global banking giant Citigroup sold its stakes in Turkeyand#39s Akbank earlier this month, provoking claims that global investors are exiting the country amid arbitrary government practices over financial institutions.

Also, a spokesperson from the Royal Bank of Scotland said last week that the bank is exploring options for the sale or wind-down of its corporate and institutional banking operations in Central and Eastern Europe and the Middle East and Africa (CEEMEA), including Turkey.

It has also long been speculated that the UK-based HSBC would halt operations in Turkey. The group chief executive of HSBC Holdings plc, Stuart Gulliver, issued a strong warning on Feb.

23 regarding the bankand#39s business in Turkey, saying the Turkish branch needs to fix certain problems before andldquomore extremeandrdquo measures are taken.

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SOURCE: Today’s Zaman