June 4, 2015

Thousands of lawsuits expected over Asya seizure

Noting that Islamic lender Bank Asya has around 18,000 shareholders, Marmara University professor of commercial law Sami Karahan has urged shareholders to file individual lawsuits against the bank's recent seizure.

A significant number of lawsuits are expected to be filed against state institutions by shareholders following what has been described by critics as an illegitimate and politically motivated confiscation of the bank.

Bank Asya was seized by Turkey's banking watchdog, the Banking Regulation and Supervision Agency (BDDK), which handed it over to the Savings Deposit Insurance fund (TMSF) last Friday. The lender -- founded by members of the Gülen or Hizmet movement, which is inspired by Islamic scholar Fethullah Gülen -- has faced a campaign of calculated attacks from the ruling Justice and Development Party (AK Party) ever since a series of corruption allegations implicating top Cabinet ministers prompted then-Prime Minister Recep Tayyip Erdoğan to crack down on the movement, which Erdoğan claims orchestrated the corruption investigation.

“At the moment there are said to be around 18,000 shareholders. One segment consists of privileged shareholders, while others purchased shares from the stock exchange. The latter group has been victimized. They can keep claiming that they didn't confiscate anyone's property rights but they seized a bank, shares fell and they are trying to make the bank collapse. There have been serious losses. All shareholders need to file lawsuits,” Karahan told Today's Zaman.

Karahan, who described Bank Asya's seizure as a “politically motivated robbery,” urged shareholders to take action, stressing that they would have a good chance of receiving monetary damages. The confiscation of the bank has proved deleterious for shareholders because they are unable to buy or sell shares. Karahan said that recent statements from the TMSF indicate that the institution is afraid of the possibility of mass lawsuits and the likelihood of legal judgments handed down in favor of shareholders.

Politicians, analysts and leading business figures alike have blasted the bank's seizure, saying it represents a clear and open assault on property rights and demonstrates the disregard that President Erdoğan and the AK Party have toward the rule of law.

The Bank Asya move came in the days leading up to the June 7 general election and on the same day as Erdoğan launched Islamic the lending operations of the state-owned Ziraat Bank. The seizure also comes two weeks after the appointment of a new chief to the BDDK, a veteran Islamic banker who recently said Islamic lenders would bolster the financial industry in line with the “New Turkey” -- a term coined by Erdoğan. It was the latest in a long series of strikes against the bank waged by the government, which have included mass withdrawals of deposits by institutions and firms close to the AK Party.

Published on Today's Zaman, 4 June 2015, Thursday

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