State inspectors warn of high penalties in Bank Asya overhaul

In the aftermath of the controversial Feb 3rd management take-over of publicly traded Bank Asya, an auditor from the banking watchdog warns that urgent measures must be taken or else there will be mass penalties.

The new board meeting of Bank Asya has yet to be held by the members of the Savings Deposit Insurance Fund (TMSF) which took over management corresponding to 63% privileged shares of Bank Asya.

They warn that the penalty could be as high as $8 to $10 billion should Bank Asya’s owners file a case against Turkey. This figure is based on a previous case involving an illegal takeover of Kentbank. Violations in the 2001 seizure of Süzer Group’s Kentbank by the Banking Regulation and Supervision Agency (BDDK) had almost cost Turkey $4.13 billion had Turkey not settled with Süzer Group in international courts.

Experts warn that the illegal and unjustifiable management overhaul of publicly traded participation bank Bank Asya may make the state liable in international courts such as the European Court of Human Rights or even be judged as a hate crime, thus opening the case up for a possible hearing at the International Court of Human Rights.

This fear is noted to be highly emphasized by inspectors of the Banking Regulation and Supervision Agency as well as the Savings Deposit Insurance Fund.

Meanwhile the controversial measures against Bank Asya has kept the BDDK occupied, staff has been doubled. Even so the attention to the bank has factored in to the decreasing effectiveness and functionality of the BDDK. BDDK figures pertaining to the overall banking sector and reports are lagging.

The institution’s “Financial Markets Report”, normally filed on a quarterly basis is outdated by two years. The annual “Structural Developments in Banking” report was last completed in 2012, Risk Assessment reports were lastly updated in 2007. Banking sector representatives and academics have filed a complaint to the Prime Ministry, due to lack of updated reports and figures. The BDDK officials’ press conferences are becoming ever more sporadic.

Lastly the void left by the Chairman of BDDK Mukim Öztekin’s departure in November 2014 over health concerns has yet to be filled, with Vice Chair Muttalip Ünal having to wear two hats, serving both as chair and vice chair.

Published on BGNNews, 23 February 2015, Monday