A legally flawed decision by Turkey's banking watchdog on Tuesday to hand over the management control of 63 percent of the privileged shares of Bank Asya to the state savings fund was supported by a number of controversial and pro-government board members at the banking watchdog, media outlets reported on Friday.
The Banking Regulation and Supervision Agency (BDDK), Turkey's banking watchdog, currently has five board members instead of the seven stipulated in the law. One of these five members has been a politically active supporter of the ruling party, the Zaman daily reported on Friday.
Tuesday's intervention in Bank Asya follows several verbal attacks by President Recep Tayyip Erdoğan on the bank. Erdoğan reshuffled the BDDK board earlier in 2014; a step observers said was designed to pave the way for a politically motivated intervention in Bank Asya.
Three high-level bureaucrats were discharged from the BDDK in January of last year, shortly after the revelation of a huge corruption probe that implicated Erdoğan.
Tuesday's intervention, which included the appointment of executives from the Savings Deposit Insurance Fund (TMSF) to the Bank Asya board, is unlawful because it is based on a legal article that does not actually sanction such a drastic measure, experts earlier stated.
One of the five current BDDK board members is Muhiddin Gülal, who served as a member of the Justice and Development Party (AK Party) municipal council of the Beyoğlu district of İstanbul until 2009. Gülal was first appointed to the TMSF in 2009 and then became a BBDK board member in November 2013. Gülal was nominated as the AK Party mayor of Beyoğlu in 2009 local elections.
A second controversial BDDK board member who backed the Bank Asya decision was Muttalip Ünal, who served at the Prime Ministry at the time of the Feb. 28, 1997 postmodern coup, when some key bureaucrats were involved in the illegal profiling of thousands of citizens.
“Steps taken by [Erdoğan] loyalists within the TMSF and the BDDK ended up haunting them in an unexpected turn of events,” read a tweet posted by an anonymous Twitter whistleblower with the pseudonym Fuat Avni earlier this week. “Bureaucrats from both institutions will soon be wiped out for being parallel [structure] members and left alone [when they appear] before justice [a court],” said Avni, who is known for making accurate predictions of government operations via his Twitter account.
President Erdoğan has repeatedly stated that Bank Asya has already failed and chastised the BDDK for not taking appropriate action against the lender. This has caused concern in markets since the Banking Law affirms the independence of the BDDK and forbids any political official from exerting influence over its decisions.
Published on Today's Zaman, 06 February 2015, Friday