Lawyers, economists criticize gov’t takeover of Kaynak Holding

The appointment of trustees to manage Kaynak Holding, which consists of 23 companies including the country's largest publishing house, has been strongly criticized by a number of lawyers and economists, who have questioned the legal justification for the takeover and expressed concern about the protection of property rights in Turkey.

Former Justice Minister Hikmet Sami Türk told Today's Zaman on Wednesday that the move to appoint trustees to Kaynak Holding is a clear violation of property rights and the right to free enterprise. He went on to say that trustees can only be appointed to a company if there is strong evidence indicating its involvement in illegal acts. Türk also said that the takeover of Kaynak does not meet the conditions required by the Turkish Penal Code (TCK) and thus constitutes a violation of basic legal rights.

The İstanbul 10th Criminal Court of Peace ordered the appointment of trustees to take over the management of the holding in a controversial move on Wednesday morning, when trustees escorted by police officers went to the headquarters of the holding in the Bağcılar area of İstanbul.

Kaynak Holding owns the largest publishing house in Turkey, the Kaynak Publishing House, and the NT Mağazaları nationwide bookstore chain and employs more than 8,000 people.

A significant share of the Kaynak Publishing House's publications are on interfaith and intercultural studies and it is also the publisher of a series of popular exam preparation books. Kaynak Holding's bimonthly Hira Arabic magazine is published in Turkey, Egypt and Morocco and has a circulation of over 90,000.

In remarks to Today's Zaman on Wednesday, a professor of law who wished to remain anonymous said that property rights in Turkey were under serious threat. “This is not the first [government takeover of a private company], nor will it be the last. [The appointment of trustees] to Koza İpek Holding was a previous example. [Turkey] is on a dangerous course,” the professor said.

The move to seize the company came only three weeks after trustees were appointed to Koza İpek Holding and its subsidiary companies. Police teams entered Koza İpek's headquarters in Ankara and the İpek Media Group's offices -- which house four media outlets owned by the holding -- in İstanbul on Oct. 27. The authority for the move came from a widely criticized court decision to appoint a board of trustees to take over the management of the holding's 22 companies. Dozens of people were fired, television stations belonging to the İpek Media Group were closed and the sales of the Bugün and Millet dailies significantly decreased following the appointment of the trustees.

Center for Legal, Ethical and Political Studies (HESA) Director Ramazan Taş said in a statement on Wednesday that Kaynak's takeover threatens foreign investment in Turkey because it erodes investors' confidence in the rule of law. “The arbitrary appointment of trustees based on reasonable suspicion, which has turned into arbitrary extortion and undermines investment in Turkey, should be immediately abandoned. … It endangers the future of Turkey,” Taş said.

‘ECtHR will overturn decision to take over Kaynak'

Doğan Cansızlar, the former head of the Capital Markets Board (SPK), told Today's Zaman on Wednesday that the appointment of trustees to Kaynak Holding based on “reasonable suspicion” that the holding was involved in wrongdoing would not be upheld if the case was appealed to the European Court of Human Rights (ECtHR).

“The move can be justified by pretexts pertaining to reasonable suspicion and appear to be in line with domestic law, but it will be overturned by the ECtHR. Such a practice can lead to questions over property rights, the right to free enterprise and the free market,” Cansızlar said.

He went on to say that the government should be wary of scaring foreign investors by failing to uphold property rights and the right to free enterprise at a time when the country is in need of foreign capital. “We need $180-190 billion of capital in the next 12 months. We need foreign cash and investments. Foreign investors will not come if there are questions over property rights and the right to free enterprise,” Cansızlar said.

‘Strict conditions should be met before appointing trustees'

In an interview with the Özgür Düşünce daily on Tuesday, former Justice Minister Türk said that the appointment of trustees to companies without proper legal justifications is destroying trust in the judiciary in Turkey.

“This has no place in the law; this is extortion. Trustees should be appointed if the executive board [of a company] no longer functions and its assets need management,” Türk said.

The İstanbul 10th Criminal Court of Justice justified its decision to appoint trustees to Kaynak Holding by reference to a possible affiliation of the holding with Turkish Islamic scholar Fethullah Gülen, who is in a self-imposed exile in the United States.

In an indictment prepared by Public Prosecutor Hasan Yılmaz, Gülen has been accused of being the leader of a terrorist group that allegedly sought to overthrow the government in 2013 via a series of graft probes implicating top government officials. There is still not a court ruling proving Gülen's guilt.

In a column in the Zaman daily on Wednesday, former Supreme Court of Appeals President Sami Selçuk said that the appointment of trustees to companies should be subject to strict criteria.

Selçuk said that trustees can be appointed only if there is strong evidence indicating that a company's board is collectively involved in crimes, according to Articles 188, 314 and 315 of the TCK, which concern the production and trade of drugs and herbs used in drugs and the supply of weapons to armed groups.

Published on Today's Zaman, 18 November 2015, Wednesday