TMSF refuses to relinquish management control of Bank Asya

In spite of the fact that more than 60 percent of Bank Asya's A-type shareholders have submitted the documents requested by the Banking Regulation and Supervision Agency (BDDK) that were the basis for recently taking control of the management of the bank, the watchdog agency has not given up that control, stoking claims that the management takeover was part of campaign of intimidation against the lender.

The BDDK ruled on Feb. 3 that management control of 63 percent of the privileged shares held by A-type shareholders be transferred to the state-run Savings Deposit Insurance Fund (TMSF), claiming that not all of the founding partners and privileged shareholders of Bank Asya had submitted certain documents to the agency, including regarding criminal records, audited financial records, tax records for five years, property records and accounts in other banks. The partners were asked to provide the documents for themselves and for any corporate holdings.

In addition to questions regarding the legal pretext used for the BDDK decision and the way the takeover was implemented, criticism of the move has focused on the argument that Bank Asya had long been a clear target of the government and that this was the latest incident in a prolonged smear campaign of dissenting voices and the institutions affiliated with them. Many believe that the government is not allowing the supposedly independent BDDK to give management control back to the partners.

There is some dispute as to just how many of the records have been submitted and accepted by the BDDK, however, following a midnight raid on the headquarters of the bank after the decision, the TMSF replaced nine members of the bank's board, including installing a new chairman.

According to the partners of the bank, over 60 percent of the privileged shareholders have sent the required documents to the banking watchdog. A government whistleblower who tweets under the pseudonym Fuat Avni and whose revelations have proven mostly to be true, argued on Twitter on Tuesday that 80 percent of the bank's shareholders had already sent the documents to the watchdog by the time of the raid on the lender's headquarters; however, the BDDK did not accept them and instead authorized the management takeover.

In addition, market observers have been speculating on social media for long that some of the Turkish firms close to the government which have assets in the bank may have deliberately avoided producing some of the required documents on time, opening the way for a takeover of the bank's board.

Since major government graft investigations were made public on Dec.17 and 23, 2013, the government and pro-government media outlets have been conducting what many call a smear campaign against the faith-based community known as the Hizmet movement, arguing that individuals allegedly affiliated with the movement who are members of the police forces and prosecutors are plotting against the government and seek to topple it. Many believe that the government has not only tried to cover up the bribery investigations since then, but also assumed an aggressive stance against certain spheres of the public which it believes to be behind the investigations.

On Dec. 14 of last year, police raided on the headquarters of the highest-selling Turkish daily, Zaman, and the Samanyolu Media Group, which are also affiliated with the movement, and detained the heads of both organizations on charges of leading a terrorist organization and defaming an al-Qaeda-linked group called Tahşiye, whose leader was detained for 17 months and later released pending trial.

Bank Asya posts loss in 2014

Bank Asya has seemingly been a target of the government's smear campaign for a year. Apart from the takeover, the government canceled tax collection and social security payment contracts with Bank Asya in August 2014. Pro-government companies also withdrew large amounts of money from their accounts, reportedly upon the request of top state officials.

Then-Prime Minister Recep Tayyip Erdoğan seemingly tried to force the bank into insolvency, publicly declaring that the bank had already collapsed, apparently trying to trigger a run on the bank. However, Bank Asya deposit holders rushed to local branches across the country and deposited more money into their accounts in a show of solidarity with the lender.

Even though the bank recorded a TL 875 million loss in 2014 according to its latest statement submitted to the Public Disclosure Platform (KAP), its non-performing ratio, the key indicator of a bank's financial performance, is still one of the highest in the sector at about 18 percent.

Published on Today's Zaman, 19 February 2015, Thursday

Related

• Context, fact and law: demystifying the Bank Asya takeover
• History of politically motivated assault on Bank Asya