RESUL – Bankrupt Ihlas Finans still owes $450 mln to 75K depositors

Bankrupt Ihlas Finans still owes $450 mln to 75K depositorsA total of 75,000 account holders in a pro-government business group’s finance arm, which went bankrupt in 2001, are still unable to recover their money, totaling $450 million, and blame the group for ignoring their calls for justice. Tens of thousands of account holders had earlier deposited millions of dollars in Turkish pro-government Ihlas Holding’s finance arm Ihlas Finans, but the holding paid only a small portion of the money after it filed for bankruptcy in 2001 due to irregularity and poor management.For years, the Ihlas Finans victims have organized themselves online and have been sending letters of complaint about the issue to the Office of the Prime Minister but have not received a response from the government. The Ihlas Finans victims — often referred to as “Ihlaszedeler” in Turkish — even established a union to pursue the legal proceedings of thousands of depositors. Ihlas Finans, which was established in 1995, started failing to pay its account holders their money amid the first shockwaves of an economic crisis in Turkey in the final quarter of 2000. The Banking Regulation and Supervision Agency (BDDK)anceled Ihlas Finans’ operating license on Feb. 10, 2001, and ordered its liquidation on Feb. 11, citing irregularity and poor management. In their 2001 report, the Capital Markets Board (SPK) referred to the irregularities in Ihlas Finans as a “Ponzi scheme,” while the Savings Insurance Fund (TMSF)hairman of the time, Ahmet Erturk, called it “an apparent siphoning of depositors’ money.” Observers back then criticized the TMSF for not seizing Ihlas Finans. A performance report dating back to 2011 reveals that the Ihlas group collected $630 million in debts. The holding paid only $7 million of this money to Ihlas Finans depositors in 2012. Following the bankruptcy in 2001, Ihlas Finans General Manager Ahmet Mucahid Ören went to the US and became a citizen there while prosecutors launched an investigation into him over alleged irregularities in the finance company. Ören became the CEO of the parent company Ihlas Holding after his father, Enver Ören, passed away in February last year. Ören’s pro-government holding owns TGRT news channel along with the Turkiye newspaper and Ihlas News Agency. The group is also active in the construction, health and education sectors. Pursuing an aggressive growth policy on the back of a strong demand for interest-free or Islamic banking services in Turkey in the mid-90s, Ihlas Finans increased its number of branches to 35 in the third year of its establishment. Before its license was revoked, Ihlas Finans had $1.17 billion in deposits in nearly 270,000 accounts. Thousands of victims await justice 13 years on One of the tens of thousands of Ihlas Finans victims, Halime Poslu (67) lives in Denizli and she has $80,000 in accounts waiting to be recovered from Ihlas Finans. Poslu told Today’s Zaman that she has serious health problems and is unable to cover her medical expenses due to her losses in Ihlas Finans. “These people have several subsidiaries in different sectors and make profits with our money, we want justice and we want the government to lend an ear to our demands,” she said. A settlement between Ihlas Finans and account holders should have been completed within five years of the bank’s closure, but the company has been delaying making the main payment and has only been making a small portion of the payment in tiny amounts. In addition, some of the payments were made using a barter system, as the victims were given use of Ihlas Holding’s timeshare facilities. Poslu’s son, Gursel, says Ihlas Holding recently sent his mother a document and asked her to sign it. “The document read that the company repaid all the money in accounts to us, but this did not happen. We did not sign it because these people apparently want to pocket the money,” he asserted. The victims also complain that some other Ihlas Holding subsidiaries have held public offerings and profited during this period, also claiming that their deposits were transferred to other subsidiaries of the holding at the time. Another “Ihlaszede,” a grocery store owner in Istanbul’s umraniye, Mustafa Ömur, (70) says he had deposited TL 70,000 in Ihlas Finans accounts and still hasn’t been able to collect this money. “People from Ihlas Holding visit me frequently and offer some apartments in the group’s housing projects as compensation. But the value they cap for these apartments is more than double the market price and I refuse to agree to this,” Ömur tells Today’s Zaman. Fatma Iirin has lost $100,000 to Ihlas Finans and has been waiting for a refund since 2001. “The holding finalizes construction projects worth billions of liras each year. If they are unable to pay our money, how can these projects be realized? We lost our jobs and homes and these people live a life of luxury,” she said, criticizing the Ihlas Holding owners

SOURCE: Todays Zaman