February 15, 2015

Law Prof. Karahan: Hate crimes against Hizmet can be prosecuted at ECtHR, ICC

The Savings Deposit Insurance Fund (TMSF) has taken over management control of some of the privileged shares of Bank Asya as part of a government-operated crackdown on institutions affiliated with the Gülen movement, also known as Hizmet, and shareholders will be filing a lawsuit against the action, but this week's guest for Monday Talk has said it is likely that the case will end up at the European Court of Human Rights (ECtHR) and even at the International Criminal Court (ICC).

“How can we expect a fair judicial process? We will eventually have to go to the ECtHR,” said Sami Karahan, a professor of commercial and banking law.

On Feb. 3, the Banking Regulation and Supervision Agency (BDDK) ordered the TMSF to take control of 63 percent of the bank's stocks and appointed a new board of directors. Following serious corruption allegations against key government figures and four ex-ministers that came to light on Dec. 17 and 25, 2013, the ruling Justice and Development Party (AK Party) conducted a campaign for the withdrawal of deposits from the bank in order to damage its financial standing.

The government claims that investigations into government corruption were part of a coup plot by Hizmet and has vowed to destroy any institutions with close ties to the movement, including Bank Asya.

Answering our questions, Karahan explained how the action against Bank Asya is unlawful and politically motivated.

A Turkish government agency took control of the management of the Bank Asya even though the bank has a strong financial standing. First, why did it happen?

The Banking Law, from Article 68 to Article 71, says what precautions can be taken if the financial standing of a bank is not good, and the TMSF can seize a bank if that is the case. However, there are no such financial concerns in regards to the case of Bank Asya. Therefore, the TMSF based its control of the management of the bank on Article 18/5, which says that the shareholders of the bank should have filed the required documentation and if not, the regulatory agency can transfer their shares to the TMSF.

By the morning of Feb. 3, 58 percent of the shareholders presented the required documents; by the afternoon of the same day 21 percent more of the shareholders presented their documents. However, the documents of the second group of the shareholders were not accepted, and the bank's management was taken over by the Savings Deposit Insurance Fund on Feb. 3. This shows that the move on the bank is not well intentioned.

What's wrong? Would you please explain?

First of all, this action is not in line with what the Banking Law's Article 18/5 says. They could have extended the deadline for the shareholders who could not complete their documents and then study the documents, and if there are shareholders who do not comply with the regulations, the right to use of their shares could be transferred to the TMSF. It is not right to take over the whole management of the bank while at least 58 percent of the shareholders met the deadline to present the required documents. Besides, when the bank went public, all of those documents were required from the shareholders.

Is there a regulation requiring a periodic evaluation of those documents?

No. Those documents are required when the bank is founded and again when it goes public. So, the regulation agency [BDDK] already has those documents -- which are quite hefty. The shareholders had one month to present those documents, which are not very easy to gather. If some shareholders present documents and some others do not, the shareholders who presented their documents should not be held accountable; their shares have been unlawfully taken over. There should have been individuality of criminal responsibility. Plus, a record keeper should have been present to document what shareholder presented which document. There was no such record keeper.

Let's assume that there was, even in this case, the move to control the management of the bank is unlawful because the TMSF should have gone to the general meeting of the shareholders with the shares that it obtained and change the management of the bank there. So, there are more than a few reasons to consider this move unlawful.

‘This is a political operation'

What's the real reason behind this move?

It's a political operation. For the past 14 months, the government has been using hate speech in regards to the Gülen movement, and despite this, the bank still remained strong. On Feb. 3, the government saw that the bank was operating without any financial problems. If there were financial problems, the government would have seized the bank based on Article 71 of the Banking Law.

In September, I filed a lawsuit against pro-government media organizations because their negative propaganda about the bank had led to a loss in the shares of the bank. By the Feb. 3 operation, there was no doubt that the bank was on a solid financial ground, and I will file a lawsuit against the government agencies for their unlawful action.

Ahmet Beyaz, chief executive of the bank, told a press conference recently that he will return to the bank and that this temporary situation will change. Is he right? Do you think this situation is temporary?

Currently, the management inside the bank is de facto and the management outside the bank is legal. The de facto management at the bank is unauthorized. They should not be doing anything there.

But they are there. How long can they stay?

I don't know what they really want. They wanted account holders to withdraw their deposits, but it did not happen. On the contrary, Bank Asya account holders put even more money into their deposit accounts. As I said, this is a political operation on the bank. The ruling AK Party leaders have been trying to realize their plans step by step -- they desire a so-called religious and autocratic government in which they will use religion to numb the masses, and their goal is to establish a one-man rule. They have created a system based on the loyalty of their supporters, and they financially reward those supporters. In that system, we should not expect security of life or property.

‘Tenders are given to pro-government businesses'

But not all businesses in Turkey support the AK Party, right?

Most of them do. The AK Party government has managed through the BDDK and TMSF to seize many businesses. Plus, through more than 100 changes to the Public Procurement Law, all tenders are given to pro-government businesses. Those plumped-up pro-government businesses also have media outlets that are used as pro-government propaganda machines to brainwash the masses to support the AK Party.

How about the established, well-rooted business circles such as Sabancı, Koç, Eczacıbaşı, etc.?

None of them can make any noise. They are all afraid. Revenue officials act on one order of the government to seize the tax documents of companies and issue record fines. So the businesses do whatever the government says. Bank Asya and free capital did not bow to the government, and that's why they have been targeted. The government targeted Bank Asya since the Gülen movement seems to be more organized than others, but we should expect more moves from the government to consolidate its power by eliminating other anti-government elements in Turkey.

Do you expect Hizmet to bow to the government as well, if it comes to the worst?

I don't. We have seen that tested while the government's anti-Gülen campaign has been continuing: People put more money into their accounts instead of withdrawing all their money. These people have ideals for their country, and it is not based on only the accumulation of capital -- they are true believers. However, they face pressures, too. All businesses that are members of the Turkish Confederation of Businessmen and Industrialists [TUSKON, a business group affiliated with Hizmet] have come under government scrutiny. People get scared.

Who else has been pressured and under threat apart from Hizmet-affiliated institutions?

Everybody who is not pro-government and who voices loud anti-government criticism. We see how anti-government media have been under pressure. Specifically, some media organizations such as the Sözcü and Yeni Asya newspapers.

Don't foreign investors and foreign shareholders of other banks feel insecure after what has been happening to Bank Asya?

They have been very uneasy, especially for the past year. From Praktiker to Levi's, many foreign firms left Turkey. Foreign investors started to leave Turkey and they will continue to do that, especially following the Bank Asya incident because nobody wants to invest in a country where rule of law does not exist; the government has failed to ensure the operation of private enterprises. I hope Turkish citizens will think and realize that we are all in the same boat and that all pro-democracy, pro-rule-of-law people will come together to form a front.

‘They are trying to get the bank's database'

What do you expect will happen to Bank Asya?

They are trying to get the bank's database -- account holders, their relations, loans, types of loans, etc. -- the type of information that is illegal to get. The first thing the government's management did at the bank was to cut the advertisements the bank gave to the free media. They might also try to seize the bank through some unlawful means, which they will invent. Otherwise, it does not seem like they can stay in the bank based on the grounds that Article 18 of the Banking Law provides.

I will continue to file lawsuits on behalf of the shareholders, and we will try to exhaust domestic judicial remedies, but I am not hopeful to go through a just process in this regard. After the government's operation against Bank Asya, judges who saw the related case file in the Ankara 8th Administrative Court have been replaced by the decision of the Supreme Board of Judges and Prosecutors [HSYK], which is under government control. The reason for this was that the judges had ordered that the relevant documents from the Savings Deposit Insurance Fund and the Banking Regulation and Supervision Agency be brought to the court! How can we expect a fair judicial process? We will eventually have to go to the ECtHR.

Would you elaborate on your views regarding how hate crimes are being committed against Hizmet members?

The new head of the Constitutional Court has said that hate speech has increased in Turkey. I tweeted him saying, “Good morning, we have long passed that stage,” because we already have hate crimes happening. Over the past year, Hizmet members have been subject to heavy insults, hate speech and hate crimes. Moreover, their businesses have been shut down. They have even been associated with terrorist acts in Turkey -- ruling party leaders claim that many terrorist acts have been committed by Hizmet. Plus, Hizmet's media have been pressured and their bank's management has been taken over.

Even though hate crimes can be punished in Turkey, we cannot expect to get just rulings from the court cases since no rule of law exists in Turkey. Therefore, such cases should be taken to the ECtHR. The Bank Asya incident will go there, too. Unfortunately, it is the Turkish taxpayers who will eventually pay the fines issued by the ECtHR.

You said that those who took control of the Bank Asya management should also expect to appear in defense in The Hague where the ICC is. Is it possible to do that because Turkey is not a party to the ICC's governing document, the Rome Statute?

Yes, Turkey is not a signatory to the Rome Statute, but there are three ways through which cases can be taken to the ICC. The ICC exercises its jurisdiction when certain conditions are met, such as when national courts are unwilling or unable to prosecute criminals or when the United Nations Security Council or individual states refer investigations to the court -- I think this can happen: the UNSC can refer an investigation to the court, and there are reasons for that.

The European Parliament had a letter of condemnation in reference to the increasing hate speech and crimes against Hizmet. The European Council had a similar statement. Then leaders of countries who were forced to close down Hizmet's schools by the Turkish government announced that they are very happy with the schools. And 89 members of the US Congress have signed a letter to Secretary of State John Kerry about the crackdown on Hizmet-linked media organizations. [The letter noted that Ekrem Dumanlı, editor-in-chief of daily Zaman, and Hidayet Karaca, CEO of Samanyolu Media Group, were arrested on Dec. 14, 2014; the letter described the charges against a total of 29 press and media personalities as “questionable.”] This shows the increasing credibility of the Hizmet group.

On the other hand, the ruling AK Party government is under scrutiny on many fronts including its alleged support of the Islamic State of Iraq and Levant [ISIL] and the historic corruption case of Dec. 17-25, 2013.

All of this brings me back to Article 7 of the Rome Statute, which talks about "crimes against humanity" -- persecution against a group or collective on grounds that might be political cultural or religious, universally recognized as impermissible under international law. I do not think the democratic and free world will close their eyes to what is happening.

‘Separation of powers being eliminated'

Outgoing chairperson of the Constitutional Court Haşim Kılıç has warned recently that the judiciary is being turned into an "instrument of revenge" by politicians, and that the government's "extraordinary interest" in the court's affairs is undermining judicial independence. What is your comment?

Judges should speak up with their rulings, not with press conferences when they retire. He avoided key decisions that would free many people waiting in jails. The new judge who will replace him, Zühtü Arslan, is supported by President Recep Tayyip Erdoğan, and the government has control of the top judiciary, according to news reports. If this is true, that means there is no separation of powers left in the legislative, executive and judiciary branches. This would be a dire development.

PROFILE: Sami Karahan is a law professor who specializes in commercial and banking law. A graduate of İstanbul University's faculty of law, he currently teaches at Marmara University. In 1987-92, he conducted research at the Ludwig Maximilian University of Munich and then in the United States. He has written books on commercial law.

Published on Sunday's Zaman, 15 February 2015, Sunday