July 18, 2014

Gov't begins plan to stamp out 100,000 firms

The Finance Ministry has reportedly started implementing a plan to bring about the closure of 100,000 firms it claims are linked to the faith-based Hizmet movement and which were already being monitored for refusing to obey the government's instructions, the Taraf daily reported last week.

The news report claimed that the Finance Ministry held a secret meeting in June to discuss ways to damage the credibility of the 100,000 companies and that a secretive unit operating under the National Police Department had already identified and profiled these firms.

Details of the plot, which is being conducted by the Cosmic Study Group (KÇG), a newly formed organization set up to eliminate Hizmet-affiliated firms, were reported by Taraf. According to the news report, despite Finance Minister Mehmet Şimşek denying the plot, five key state institutions have started to implement the plan to financially ruin the firms.

To this end, the ministry first reportedly launched a money-laundering probe against some of those companies, many of which had already been blacklisted by the Finance Ministry on the basis of donations that they made to certain educational institutions.

The first step of the plot was reportedly taken during a meeting in the building of the Finance Ministry's Revenue Administration (GİB), where all taxpayer information is gathered, in İstanbul in June, and a roadmap was discussed to prevent these firms from flourishing in the Turkish economic system.

Taraf said that the meeting consisted of prosecutors, Finance Ministry officials, representatives of the Finance Ministry's Financial Crimes Investigation Board (MASAK) -- which controls, inspects and investigates the movement of cash and all financial transactions in Turkey -- and officials from the Capital Markets Board (SPK).

According to Taraf, as the first step of the plot, a group of ministry officials are convening regularly to discuss the stages and the course of the plot.

The operation against the firms is reportedly being conducted by five key agencies: MASAK, the SPK, the Finance Ministry's Tax Inspection Board (VDK), the National Estates General Directorate and the GİB.

MASAK is at the center of the investigation as it had previously launched a probe against some of these firms on the grounds that they are involved in money laundering activities through some suspicious donations by the firms, Taraf said.

According to Taraf, MASAK monitored donations by the Hizmet-affiliated firms to certain educational institutions, considering them to constitute suspicious economic activity and began its far-reaching investigation.

The state institutions discussed in detail the data concerning the profiled firms and shared the content of files concerning the activities and transactions of these companies and a plan was formulated to block the activities of these firms within their economic activities in Turkey. A multi-stage plan to exclude these companies from the economic system was discussed in the meetings and, according to the first phase of the plan, these firms will be sent a notice concerning the information gathered about them.

After these notices have been sent to the companies, the related state agencies will begin a detailed inspection into these firms. At this stage, MASAK will step in to carry out an inspection.

A high-ranking Finance Ministry official recently called a group of ministry officials meeting and said: “As you know, there are lots of things to do nowadays. We are holding a series of meetings on the subject,” provoking reactions from some bureaucrats.

These firms, in accordance to the report by MASAK, will be able to be closed down.

Published on Today's Zaman, 18 July 2014, Friday