September 15, 2014

State agency criticized for speculative Bank Asya report

A week after a speculative report regarding the fate of a leading Islamic lender, Turkey's state-run news agency continues to receive criticism for targeting a private entity at the expense of breaking laws.

The state-run Anadolu Agency, among some other pro-government media outlets, cited last week an official from the Banking Regulation and Supervision Agency (BDDK) as saying the Islamic lender Bank Asya had been put under the scope of Article 70 of Turkey's Banking Law, which governs the BDDK's intervention in troubled banks. Anadolu has said the banking watchdog had made sweeping moves against Bank Asya, a move that gives the BDDK the power to restrict or temporarily halt the bank's operations, as well as to merge it with another bank. Bank Asya reacted strongly to the report, saying the bank will file lawsuits against the BDDK and media outlets that spread the speculative news report.

Meanwhile, the BDDK has neither confirmed nor denied the Anadolu news report that quoted a senior BDDK official.

Market observers criticized the Anadolu Agency for sharing exclusive details -- the authenticity of which cannot be verified -- regarding a privately run financial institution, suggesting that such reports are in violation of laws regulating and protecting banks in Turkey. On Saturday Turkish media quoted Finance Minister Mehmet Şimşek as referring to reports on lenders as “ill-intentioned, speculative and fabricated news pieces.” Şimşek did not directly refer to Anadolu, but he was answering a question regarding speculation about the Turkish finance industry.

Anadolu defended itself following Bank Asya's reaction, saying that “the news report is accurate according to the information we obtained."

Among other powers, Article 70 allows the BDDK to force staff changes on a troubled bank, including the top management, with new staff to be approved by the watchdog. Anonymous sources speculated last week that more than 10 banks in Turkey were under scrutiny within the scope of Article 70.

Bank Asya is affiliated with Turkey's largest faith-based movement, Hizmet, which President Recep Tayyip Erdoğan has accused of plotting against him following two separate corruption probes implicating him and family last December. Following his victory in the presidential election in August, Erdoğan has repeatedly said the campaign against Hizmet would intensify. Last month, the government canceled tax collection and social security contracts with Bank Asya, a move seen by observers as an attempt to weaken the lender. However, Bank Asya said those actions would not have a significant impact on its activities.

Published on Sunday's Zaman, 14 September 2014, Sunday