The Turkish government is reportedly planning to seize a big conglomerate whose media holdings are critical of the government ahead of the Nov. 1 general election by orchestrating falsified reports issued by the Finance Ministry's Financial Crimes Investigation Board (MASAK), which is led by a partisan figure.
The government-led police raids on the corporate offices of Koza İpek Holding in Ankara and its subsidiaries on Tuesday were carried out after MASAK submitted a report to the Ankara Public Prosecutor's Office whose allegations were published by the pro-government media, despite the holding refuting the report's findings.
In a two-page letter dated Aug. 14, 2015, and submitted to the Anti-constitutional Crimes Investigation Bureau at the Chief Prosecutor's Office in Ankara, MASAK President İbrahim Hakkı Polat asked the prosecutor to seize the conglomerate and appoint a trustee to replace the existing board of directors. He claimed that the investigation into the holding's assets can be done better if the government takes over the company.
Polat made a series of allegations that are based on an anonymous informant's account without offering any evidence to suggest that the whistleblower's account has any credibility. For example, he alleged that the holding's investment in the UK -- a 60 million pound company established in March 2014 -- may be a shell company to funnel money overseas. However, Koza İpek Holding -- a publicly traded company -- had already sent a written notification to Borsa İstanbul (BIST) that it had established a subsidiary in the UK named Koza, Ltd. to carry out possible gold extraction abroad.
Company officials said on Wednesday that many Turkish conglomerates have established subsidiaries abroad to expand their investment and diversify their portfolios. They noted that if Koza İpek Holding is accused of wrongdoing by establishing a presence overseas, then all other Turkish companies that have invested abroad must be treated as suspects as well. They also added that the UK subsidiary was set up after permissions were obtained from Turkey's regulatory bodies, including the Capital Markets Board (SPK), the Competition Board and BIST, as required by law for publicly traded companies.
The MASAK president listed a series of hypothetical situations in which Koza İpek Holding may be involved in unlawful activity based on an anonymous letter the agency received on July 28. Although he described them as “claims,” he asked the prosecutor's office to take over the company rather than conducting a preliminary query to establish whether the claims merit any further investigation.
Nevertheless, the request by MASAK is seen by many observers as unsurprising, given that the agency was completely reshuffled in the aftermath of the December 2013 graft investigations, which implicated some family members of then-Prime Minister and current President Recep Tayyip Erdoğan and some of his political and business associates. The investigation, which was later stifled, featured a report by MASAK on suspicious money transfers involving Iranian businessman Reza Zarrab.
In that MASAK report, a bank inspector recommended that financial transactions by Zarrab and his associates be monitored by the police due to evidence that they were laundering money. The report mentioned a number of individuals suspected of transferring large sums of cash into and out of the country, saying that these individuals had frequently made short-term trips abroad and were conducting suspicious bank transactions. It highlighted that transactions involving large amounts of money flowing into and out of Turkey conducted outside of the country's banking system should be monitored in accordance with the law concerned with the prevention of money laundering.
After the December 2013 probe became publicly known, the government tried to stifle it by carrying out an unprecedented purge in the police, the judiciary and other state bodies. A new team was appointed to serve at MASAK and Polat, its new head, is a vocal supporter of Erdoğan who has often publicly praised the Turkish president on his personal Twitter account.
The reshuffle in MASAK was strongly criticized by the main opposition Republican People's Party (CHP). Lawyer and then-CHP lawmaker Atilla Kart submitted a parliamentary question in 2014 to Finance Minister Mehmet Şimşek, asking him why the government felt the need to completely change the personnel at MASAK and appoint a figure known to be a supporter of Erdoğan as its president. Kart said that the government needs to explain the reasoning behind the rushed reassignments and the demotion of former MASAK President Mürsel Ali Kaplan, who had been the institution's head for five years. Şimşek never responded to the question, despite the fact that he is supposed to respond to parliamentary questions within 15 days.
The government has been accused of seeking to control the media arms of Koza İpek Holding by taking over the corporate entity ahead of the Nov. 1 general election. The Turkish dailies Bugün and Millet, TV stations Bugün TV and Kanaltürk and the website BGNNews.com, which are owned by the holding, have long provided an important platform for independent and opposition voices in Turkey.
Even if the government plans to seize Koza İpek Holding and by extension its media branch, the Turkish Constitution provides greater protection for media companies and publishing houses than regular businesses in takeover procedures. Article 28 of the Constitution says that the press is free and cannot be censored, while Article 30 states that media organs cannot be seized if they are operating legally.
Furthermore, the case law of the Constitutional Court stipulates that even though they are private enterprises, media companies cannot be considered normal private companies when it comes to taking over and appointing trustees. The top court has established that taking over media outlets and appointing trustees to their management should be considered censorship.
Ahmet Altan, a Turkish intellectual and author, said in an interview aired on Bugün TV on Tuesday evening that the government is run by Erdoğan and his associates as if it is a mafia organization and that they no longer care about the Constitution and the law. “They want to intimidate the critical media and are testing the water with Koza İpek,” he said, warning that “if they get away with what they are doing to Koza İpek, they will go for the next target, which is Aydın Doğan's media group and others.”
Published on Today's Zaman, 2 September 2015, Wednesday