September 29, 2014

BİST applies double standard to Bank Asya

The Borsa İstanbul (BİST) has announced that shares of Islamic lender Bank Asya will be traded in the “watch-list market” as of Sept. 30, although the bank's financial structure is strong.

The BİST administration did not give any warning to Bank Asya about this decision. However, last week BİST gave a warning to the Beşiktaş and Fenerbahçe sports clubs on the same issue and it also recently allowed time for the Galatarasay and Trabzonspor sports clubs to improve their capital structure.

Another example of a double standard for Bank Asya, which has been subjected to a smear campaign aiming at its seizure, has come from BİST. It suspended the bank's stock twice on Sept.17 after the bank's shares reached the ceiling price, and the bourse continued its biased stance against the bank in the following days.

Yet BİSK went further and took a scandalous step. Without bothering to present a solid and legal reason, it announced that the shares of Bank Asya would be traded in the watch-list market as of Sept. 30. Being in the watch-list market when trading can only be made with a single price between the hours of 2-5:30 p.m. puts a company in a disadvantageous position.

BİST has various criteria to put a company in the watch-list market. In general, companies that have technically gone bankrupt or don't make any business and have stopped production are first given a warning. They are then given a deadline before they are put in the watch-list market.

For instance, BİST gave a warning recently to the administrations of the four largest sports clubs in Turkey to this effect.

A warning was also given to Beşiktaş in 2013. However, the bourse administration that examined the financial structure of the Black Eagles found out that there was not any improvement. Beşiktaş was given until Dec. 31 of this year to announce its plan for recovery. If no improvement is seen in the financial picture of Beşiktaş on May 31, 2016, sanctions may be imposed on the sports club.

Fenerbahçe has been warned by the bourse due to its increasing financial loss. The Yellow Canaries, which were earlier warned by the bourse, have improved their capital structure. Despite its worsening rolling capital and rising losses in the financial year, Fenerbahçe has not been given a deadline before sanctions are imposed.

The BİSK administration earlier gave similar warnings to Galatasaray and Trabzonspor to improve their capital structure.

As was the case with the four largest sports clubs, BİSK gives warnings to companies that have the potential to cause a financial loss for investors to give them time to improve their situation.

Taking all this into consideration, the bourse's putting Bank Asya -- which has a high rate of equity capital and capital ratio, is still profitable and has taken action to strengthen its capital -- in the watch-list without even giving a warning is a perfect example of a double standard. Under normal circumstances, such a company should be included in the watch-list.

BİSK President İbrahim Turhan has said the decision concerning Bank Asya has been made in line with the technical requirements and the framework set by the legal regulations. But this statement was not satisfactory either for the company or investors. It is a must for BİSK to inform the public by revealing the legal ground of its decision.

Published on Sunday's Zaman, 28 September 2014, Sunday