Friday night Turkey’s Banking Regulation and Supervision Agency (BDDK) seized the country’s largest Islamic lender Bank Asya, allegedly for political reasons, prompting nationwide outcry from Ankara’s critics and opponents.
“The decision to seize the bank has no place in either domestic or international law,” lawyer for Bank Asya’s controlling shareholders Süleyman Taşbaş told Bugün daily, who added that they will be filing a suit for the cancellation of the seizure order and, if domestic law is unable to help them, they will then proceed to the European Court of Human Rights (ECtHR).
The BDDK’s decision to seize Bank Asya came after months of a systematic government-orchestrated campaign aimed at undermining the bank. Bank Asya has seen depositors including state-owned firms and institutions withdraw funds this year, with the government canceling tax collection and social security payment contracts in August.
Pro-government media carried almost daily reports on Bank Asya's woes earlier last year, portraying it as a failing bank, and Turkish President Recep Tayyip Erdoğan has on several occasions expressed defamatory remarks about the bank, accusing it of having bad financials and even once claiming that the bank was already sunk.
The BDDK announced its decision late on Friday while reports of seizure appeared in pro-government outlets hours before the BDDK announcement. Meanwhile government whistleblower and Twitter phenomenon Fuat Avni had also tweeted earlier in the day that President Recep Tayyip Erdoğan asked the banking watchdog to seize long-oppressed Bank Asya. The whistleblower said Erdoğan met with the board members of the BDDK at 3.00 p.m. and ordered newly appointed chair of the watchdog to seize Bank Asya in a bid to consolidate the ruling Justice and Development Party (AK Party) votes ahead of a parliamentary election that is slated for June 7.
The move followed an earlier decision to take management control of the bank citing its failure to meet legal criteria. The BDDK ruled on Feb. 3 that management control of 63 percent of the privileged shares held by A-type shareholders be handed over to the state-run Savings Deposit Insurance Fund (TMSF). The agency claimed that some privileged shareholders in Bank Asya had failed to submit certain documents to the agency within one-and-a-half months, including documents regarding criminal records, audited financial records, tax records of the past five years, property records and accounts in other banks. The shareholders were asked to provide the documents for themselves and for any corporate holdings in which they had ownership. The short time allowed by the agency for the submission of the documents, however, stirred reactions from shareholders.
Since the management takeover in February, 91 percent of the documents the BDDK requested from the 183 partners were submitted as of April 12th. Noting that businessmen who are close to the government are exempt from submitting such documentation, Lawyer Taşbaş adds that the seizure decision is completely political and a smear campaign attempting to draw attention away from the government’s other woes in the lead up to the election.
Main opposition Republican People’s Party (CHP) deputy Mahmut Tanal said the seizure is a result of a completely political decision, adding that it violates the right to private property and is a threat to the business world. Meanwhile CHP Deputy Akif Hamzaçebi echoed Tanal’s sentiments, “The seizure is completely against the law. The BDDK does not have such authority. They will pay for this in time. Tomorrow politicians might go, and the bureaucrats will be left having to answer for their signatures.”
Nationalist Movement Party (MHP) deputy Oktay Vural said “This is not an economic decision, the seizure is completely politically motivated,” while MHP deputy Lütfü Türkan said the seizure of Bank Asya shows that the government’s “ship is sinking.”
Sami Karahan, a professor of commercial and banking law, said the seizure is an act of “political hijacking” of private property and it is completely against the laws and the Constitution. “Those who did this will sooner or later give an account for their actions,” he said.
“Practices that should not be seen in a country with rule of law have been employed against Bank Asya,” said former Capital Markets Board (SPK) President Doğan Cansızlar, “A state should not have allowed such attempts to lay the groundwork for the sinking of its own national bank.”
Published on BGNNews, 30 May 2015, Saturday