Prosecutor behind Koza Ipek seizure urged to face truth in PwC report

A decision by a controversial court to place a leading Turkish conglomerate on receivership over alleged abuses contradicts an earlier report by leading US-based auditing firm PricewaterhouseCoopers (PwC), which said that the company was clean and met standards, experts told Todayand’s Zaman.
Koza ipek Holding and its publicly-traded subsidiaries had been audited since 2009 by the PwC, which is one of the worldand’s top four auditing firms and serves in 157 countries with more than 208,000 employees. A decision by a judge in Ankara on Monday ruled for the handover of the administration of the groupand’s 22 companies to a board of trustees. The judge is from a court specially set up by the interim Justice and Development Party (AK Party). The 22 companies include two newspapers, a radio station and two popular TV stations, which have long been the main platform for critical voices. The court decision must be overturned since it — along with an expert report behind it — is legally-flawed and ignores all state and private auditing mechanisms in Turkey, experts argue. Experts suggest that a recent PwC report invalidates the allegations against Koza ipek, in the first place. One of those allegations brought forward by the politically-motivated court in Ankara was that Koza ipek lent financial support to terrorist groups.
and”If that [terror financing] is the case, then why doesnand’t the prosecutor launch a probe into the PwC as well? andhellipIf the court is the sole auditing mechanism in Turkey, then why did the government give an operating license to PwC or any other firm to audit similar cases?and” economist Yaiar Erdinandc told Todayand’s Zaman on Thursday. The company has served some of Turkeyand’s top companies from seventeen separate sectors since 1981 and currently has 1,500 personnel based in Istanbul, Ankara, Bursa and izmir. The allegations leveled against Koza ipek stain PwCand’s image as the responsible auditing firm, economist ibrahim andOztandurk argued with Todayand’s Zaman on Friday, saying, and”I donand’t think it is possible for any business in Turkey or the world to buy their way into such a large-scale, credible auditing firm as PwC. andhellipthey wonand’t resort to bribery or bow to political pressure. So what is wrong?and” On a global scale, PwC firms provided services to 418 companies in the Fortune Global 500 and 443 in the Financial Times Global 500 lists, the companyand’s website reads.
A PwC Turkey audit report for 2014 states that Koza ipekand’s financial performance and cash flow for the year were in and”accordance with the financial reporting standards accepted by the Turkish Capital Markets Board (SPK)and”.
and”All accounting records between the years 2009 and 2015 reflect the truth,and” PwC said in its report. PwC Turkey was not immediately available to comment on the issue on Thursday. A source familiar with the issue told Todayand’s Zaman that the company maintained its position regarding Koza ipek and may refrain from making any further comment.
and”Are you going to launch a probe into the PwC for allegedly covering up abuse in Koza ipek? Are you considering any legal action to potentially cancel the operating license for PwC in Turkey? Is there any such plan to appoint a trustee to PwC Turkey for allegedly turning a blind eye to terrorism financing?and” Erdinandc asked the prosecutor in his column on Bugandun daily on Wednesday. Erdinandc told Todayand’s Zaman that the board of trustees blocked him from writing his column for Bugandun following these comments.
Rian Karluk, an assistant professor of economics at the Ankara-based Turgut andOzal University, stressed earlier this week that the judgeand’s decision went against legislation and maintained, and”The appointment of trustees has revealed the mechanism of free enterprise does not work in Turkey.and” Karluk noted that if the Ministry of Finance had noticed evidence of any wrongdoing, the receivership would have been legitimate. He added that the decision is illegal if this is not the case. He underlined that the Koza ipek decision may have ramifications for Turkeyand’s sovereign credit rating, investment appeal and therefore economic growth.

SOURCE: TODAY’S ZAMAN