ErdoIan aisor targets top private lender after Bank Asya

President Recep Tayyip Erdoganand’s chief economic aisor, Yigit Bulut, has filed a criminal complaint against Turkeyand’s largest private lender, is Bankasi, over alleged wrongdoing in a recent sale.
The move follows earlier speculation that the bank could face a takeover by the countryand’s banking regulator.
Speaking to the A Haber channel late on Friday, Bulut attacked is Bankasi, accusing the lender of irregularities during the sale of a subsidiary back in 2005 to the business group Dogan Holding, which is known to be critical of the government. is Bankasi sold and”Turkeyand’s Diibank — Turkeyand’s seventh largest private bank at the time — to Dogan for $50 million before Dogan sold the bank to the Belgian-Dutch joint-owned Fortis Bank for 985 million euros in 2005,and” Bulut recalled.
He added that is Bankasi shareholders, including the main opposition Republican Peopleand’s Party (CHP), may have gained unfair profits from Diibankand’s sale. The statements come hot on the heels of a takeover by bank regulators of the countryand’s largest Islamic lender, Bank Asya. The regulators justified its move by saying Asyaand’s financial structure and management presented a threat to the financial system. The bank denied the claim, and shareholders are this week expected to challenge the takeover in court.
The Diibank sale to Fortis was by far the largest bank sale in Turkish history up to 2005.
Back in January a government whistleblower who tweets under the pseudonym Fuat Avni said Erdogan had ordered Turkeyand’s banking watchdog to take over is Bankasi, much as it did to Bank Asya in May. In the past few months, investors in Turkey have been unnerved by government criticism of the central bankand’s interest rate policy, growing concern about weakening judicial independence and the troubles of Bank Asya. The whistleblowerand’s claim that the countryand’s biggest private bank could face action by the regulator sent shockwaves through the banking industry, while the banking watchdog failed to respond to requests regarding the allegations. The government denied the claims of is Bankasi being seized at the time, and Erdoganand’s office said it was not informed of any such plan.
h2Feeding the dirty networkh2 Market experts have warned that the watchdog might actually seize the largest private lender to breathe life into an alleged shadow public sector run by Erdoganand’s inner circle. is Bankasi has in separate statements said that its activities were in compliance with banking laws and called reports about its activities incorrect. and”That is not enough. andhellip Bank Asya was the strongest and most transparent bank in Turkey and the region when it was illegally seized,and” Serdar Sement, a political analyst at Istanbul-based consulting firm S. Biliiim Daniimanlik, told Todayand’s Zaman.
Sement earlier claimed that the Turkish government manipulates public bank funds to cover up the failings of the shadow public sector. and”I do not see any obstacle that could prevent them [government] from seizing is Bankasi. andhellip This is going to be their top agenda after the elections,and” Sement added. On the same issue, market pundits have long been criticizing Erdogan for ignoring the threat that Turkey could repeat the lost fiscal discipline and crony capitalism of the ominous pre-2001 economic crisis era with its illegal actions.
and”Erdogan and his inner circle, backed by rich oligarchs, have been blocking major Turkish private banks from paying dividends to shareholders for the past seven years, and nobody can raise their voice against this. andhellip The Turkish banking industry is under siege by this circle,and” Sement asserted.
and”Erdogan has to feed funds coming from dirty networks to the public shadow economy his dream of a one-man rule hinges upon this. We could see more seizures unless is Bankasi fails to quench the networkand’s thirst for hot money at a time of a cash drought and as the US Federal Reserve prepares to taper its stimulus package,and” Sement concluded.

SOURCE: Today’s Zaman