February 6, 2015

Unjustified takeover of Bank Asya prompts harsh rebuke from journalists

The arbitrary takeover of Turkey's largest Islamic lender, Bank Asya, has caused a backlash among journalists, who voiced concerns over disregard for the law and a free business environment, warning that a heavy toll will be exacted from the country's economy.

Turkey's banking watchdog, the Banking Regulation and Supervision Agency (BDDK), handed management control of 63 percent of the privileged shares of Bank Asya over to state savings funds on Tuesday, citing a lack of certain key documents as the reason why the bank cannot maintain its operations. The bank's shareholders are currently preparing to provide the watchdog with the required documents and the bank has also taken legal action to revoke Tuesday's intervention, legal experts familiar with the issue told Today's Zaman on Thursday.

Özgen Acar from the Cumhuriyet daily said economic experts question the soundness of the Savings Deposit Insurance Fund's (TMSF) decision to take control of Bank Asya's boards, as the state watchdog did not wait for the bank's general meeting and did not reveal which shareholders in the bank failed to provide information on their financial status.

Acar maintained that foreign observers expect to see a decline of investments in Turkey as the confidence in its banking system has been shaken and its prestige in the international arena has been weakened.

Taha Akyol, a veteran columnist from the Hürriyet daily, said the fact that government officials needed to say that the takeover of Bank Asya was not a political decision but a legal one shows that they are aware that there are widespread doubts over the independence of state institutions such as the Central Bank of Turkey and the BDDK.

“If there is a widespread suspicion that the [independent] institutions operate under political pressure, even legal decisions would be met with skepticism. If the political powers that be already declared, 'That bank [Bank Asya] has already sunk,' if the terms of the Banking Law were not put into force against [speculative] rumors to sink the bank, then of course there will be questions on whether the decision [to take over Bank Asya] was to what extent political or legal,” said Akyol.

Referring to a previous Reuters report, in which Turkey is depicted as a country where foreign investors' confidence will be damaged due to political interference in the economy, Akyol stressed that when the principle of the separation of powers is challenged, state institutions lose their credibility.

“Is there a country [other than Turkey] which harasses its central bank this much? In the 2014 progress report [on Turkey] the world saw how the judiciary [in Turkey] was subjected to political interference,” said Akyol.

Melih Aşık from the Milliyet daily lamented President Recep Tayyip Erdoğan's recent criticism of the central bank for the latter not dropping interest rates; the lira then lost value against the dollar following Erdoğan's speech.

Considering the takeover of Bank Asya's management by TMSF together with Erdoğan's pressuring of the central bank, Aşık maintained that in Turkey both the independent regulatory agencies that exist and the law have become redundant, which would scare away foreign investors.

Erhan Başyurt, from the Bugün daily, argued that the takeover of Bank Asya dealt a blow to foreign investors as well because part of the lender's shares are also owned by foreigners.

He further added that if the foreign shareholders in Bank Asya incur financial loss, they would bring the matter to international courts such as the European Court of Human Rights (ECtHR), which would make Turkey pay reparations for their losses.

He recalled the seizure of Kentbank in 2001 by the government, a move which cost Turkey dearly, as the ECtHR, which was appealed to by the owner of the bank, demanded that the bank's operating rights be returned and that $4.13 billion be paid in compensation.

Takeover of Bank Asya is precursor to crackdown on dissenting media

Ergun Babahan from the Millet daily interpreted the usurping of control of Bank Asya as a precursor to a forceful takeover of Turkey's best-selling Zaman daily, in a move to silence a media outlet that is in opposition to the government.

He underscored that the TMSF, which has taken over the 7.15 percent share belonging to Ali Akbulut -- who once owned of 25 percent share of the Feza Gazetecilik media group, which the Zaman daily is affiliated with -- at Bank Asya, might also decide to appoint new members to the Zaman daily's management board, as the banking law permits it to do so.

“With the endless opportunities offered by the banking law, the media outlets which cause discomfort [to the government] will be silenced. Because they don't toe the line [of the government], when the heads [referring to Ekrem Dumanlı and Hidayet Karaca, the heads of Zaman daily or Samanyolu Broadcasting Group respectively], faced detentions but did not give up [on voicing criticism against the government]. The radical solution [for the government], to convert Zaman into Sabah or Yeni Şafak [pro-government media outlets] if they [the government] make such a move don't be surprised,” said Babahan.

Murat Aksoy, from the Millet daily, interpreted the state's takeover of Bank Asya as a consequence of the ruling party's bid to alienate the Gülen movement's (also known as the Hizmet movement) sympathizers in society, as Bank Asya is affiliated with the movement.

He added that the repercussions of the lender's takeover on the economy and the backlash the government receives from the world for its actions are secondary concerns for it.

Published on Today's Zaman, 06 February 2015, Friday