A media outlet has reported that the decision by the Banking Regulation and Supervision Agency (BDDK) to take control of the board of Bank Asya, Turkey's biggest Islamic lender, was leaked to stock exchange players ahead of time.
According to a news report by the Taraf daily, in the final hour of trading at Borsa İstanbul (BIST) on Tuesday, Bank Asya's shares recorded a flurry of activity. Those who had received the leaked information sold the shares they held, causing a 4.2 percent decline in value of Bank Asya shares in just an hour.
Leaking information, also known as insider trading, is considered a major crime and is punishable under the Turkish Penal Code (TCK).
Interior Minister Efkan Ala had previously argued that Bank Asya had purchased a large amount of US currency shortly before the Dec. 17, 2013 corruption and bribery operation and said he had proper documentation to prove this allegation. However, data revealed later by the central bank disproved this allegation. The unethical trading practice Ala had referred to in his allegation, however, was the same employed before the operation against the Bank Asya board was carried out.
The details of the insider trading allegations in the Bank Asya operation are as follows:
The Taraf daily, based on information it received from economy bureaucrats, argued that the central bank had postponed a decision to hold an interim meeting on Feb. 3 when the inflation rate was announced. Markets responded positively and the currency rates significantly declined. The bureaucrats had expected serious improvement in the stock exchange.
However, in the final hour before the end of the session, intense activity was observed in Bank Asya shares. The BIST index declined by 2.46 percent on Feb. 3, while the decline in value of the bank's shares was 4.24 percent. Economy bureaucrats did not understand the reason for this decline.
The reason for the uptick in activity in Bank Asya shares lies with the BDDK, the report said. Its operation against the bank raised suspicions concerning its operations and sales in the final hour of the trading session on Tuesday. Economy bureaucrats determined that the BDDK had decided to carry out the operation at 3:30 p.m. and communicated this decision to the office of the president, the office of the prime minister, the Savings Deposit Insurance Fund (TMSF) and the police.
In the meantime, the information was also leaked to the some stock exchange players. The economy bureaucrats acquired certain crucial information on the matter, according to report on the daily, and concluded that that the unexpected activity gave indications of insider trading.
Only a review by the Capital Markets Board (SPK) can clarify the matter. Whether or not the SPK will perform a review of the transactions and operations on Feb. 3 remains uncertain.
Published on Today's Zaman, 05 February 2015, Thursday