April 10, 2015

Bank Asya delivers shareholder info to BDDK, pretext for seizure vanishes

Turkey's largest Islamic lender, Bank Asya, announced on Thursday evening that it has sent documents regarding a total of 152 shareholders to the Banking Regulation and Supervision Agency (BDDK).

The banking watchdog had previously taken management control of the majority of the bank's privileged shares, citing the absence of shareholder information.

In a statement to the Public Disclosure Platform (KAP) on Thursday night, Bank Asya said the documents were delivered by its shareholders to the bank and then sent to the BDDK.

The BDDK should have given up control of the bank when 51 percent of the shareholders submitted the documents, Sami Karahan, a professor of commercial and banking law, told Today's Zaman. With Thursday's announcement, Karahan said the bank's interim board has passed the buck to the BDDK because it knows that it would be held responsible for the illegitimate management of the bank. He added that the matter could be taken to international courts if not resolved.

On Feb. 3 the banking watchdog handed management control of 63 percent of Bank Asya's privileged shares over to state savings funds, citing insufficient transparency to allow for proper regulation. Bank Asya's management and shareholders, however, denied the existence of flaws in the bank's transparency and said the decision was a government-orchestrated bid to sink the lender.

Following the state-run Savings Deposit Insurance Fund's (TMSF) announcement that it would take over the majority of the bank's stock and appoint a new board of directors, Bank Asya clients stood in long lines outside of numerous branches across the country in a show of support for the bank. Many of the bank's customers reportedly sold belongings, including items such as furniture and wedding rings, and deposited the money into their accounts.

Bank Asya shareholders lodged a complaint with the banking watchdog, accusing it of damaging the financial interests of the shareholders and vowing to take legal action seeking compensation worth TL 94 million.

On behalf of 94 privileged shareholders, who previously had the right to nominate Bank Asya board members, lawyer Süleyman Taşbaş sent a complaint petition to the BDDK, arguing that the agency's deputy chairman, Müttalip Ünal, had not taken into consideration the fact that the vast majority of shareholders had delivered the requested documents to the agency despite two months having passed since the takeover.

Former Central Bank of Turkey Governor Durmuş Yılmaz warned earlier this week that the sinking of the bank would be very harmful for the economy, noting that it has a strong deposit structure.

Bank Asya, founded by Turkish Islamic scholar Fethullah Gülen sympathizers, has seen depositors, including state-owned firms and institutions, withdraw funds this year in what it has described as a systematic campaign to undermine it.

Pro-government newspapers ran nearly daily reports on Bank Asya's woes earlier last year, portraying it as a failing bank being propped up by members of the Gülen movement, also known as the Hizmet movement.

The government canceled tax collection and social security payment contracts with Bank Asya in August and President Erdoğan publicly claimed that the bank had “already sunk.”

Published on Today's Zaman, 10 April 2015, Friday