Unpaid ‘partisan loans’ squeeze Turkish public bank

Having failed to tackle billions of lira of outstanding debt owed by pro-government companies to state-run lenders, regulators are clamping down on dissenting conglomerates despite their strong financial records.
Earlier this week, the management of Koza ipek Holding was put under administrative receivership by an Ankara court based on a botched expert report raising unproven suspicions that the company is financing terrorism. Akin ipek, the CEO of the holding, said many times over the past week that his company hasnand’t committed any financial misdemeanors nor does it have any unpaid loans, underlining that Koza ipek Holding was pressured only because of his political views.
Many pro-government businesses are, on the other hand, often free from scrutiny despite owing large amounts of debt to public banks. The issue is even addressed in the Court of Accountsand’ inspection reports.
As of August, the Ankara-based Yildizlar SSS Holding, which is known for its explicit support for the Justice and Development Party (AK Party), owed TL 3.2 billion of debt, TL 1.1 billion of which had been obtained from Halkbank, a state-run bank.
The Court of Accounts highlighted the issue in its recent reports, which stated that public resources are being wasted by state-run banks agreeing loans to a company with poor credit records ranging from missed loan repayments to bounced checks and contested bills.
Yildizlar Holding acquired formerly state-owned firms including Eti Gandumandui, a Turkish mining company, Gediz, an electricity distribution firm and Osmangazi, an electricity distribution company, after winning privatization tenders during the AK Party rule spanning the past decade. Osmangazi was later seized by the Energy Market Regulatory Agency (EPDK) due to the companyand’s outstanding debt of TL 180 million that it owed to the Turkish Electricity Trading and Contracting Company (TETAi).
The holding was also mentioned in the tweets of popular government whistleblower Fuat Avni last year. Avni said Handuseyin Aydin, once chairman of Halkbank and now in the same role at Ziraat Bank, gave a loan of TL 1.1 billion to Yildizlar in a bid to win the President Recep Tayyip Erdoganand’s favor. Underlining that the aforementioned credit amount is the largest bad loan on record in the history of the Turkish banking sector, Avni accused the Banking Regulation and Supervision Agency (BDDK) management at the time of overlooking what it called a sweeping waste of public resources.

SOURCE: TODAY’S ZAMAN