April 30, 2015

In dubious battle

İbrahim Türkmen

The usurping of managerial rights of the majority of Bank Asya's privileged shareholders by the Banking Regulation and Supervision Agency (BDDK) is a subject I visit quite often because it is very important.

It is important to show support for the downtrodden and to take sides against injustice. It is important to warn that such high-handed practices deter investors and eventually axe the economy's roots. It is important to invite oppressors to the realm of fairness and legitimacy for the sake of humanity.

A few days ago Süleyman Taşbaş, the lawyer representing the bank's shareholders, told the media that documents the BDDK had required only Bank Asya to prepare and submit within a very short period of time had been submitted incrementally since they were requested. Emphasizing that as of this week, 94 percent of the documents had been submitted to the BDDK, Taşbaş called for the confiscation of Bank Asya to end immediately.

The BDDK has turned a deaf ear to this demand, and the courts have been prevented from sorting the problem out. It wouldn't be an exaggeration to call this move by the government-controlled banking watchdog against the largest Islamic lender, aimed to apparently make some of its owners miserable because of their connections with the Hizmet movement, “bank robbery.” Warnings about the perils of this scandalous move have been voiced repeatedly by many in Turkey and abroad, even by international credit agencies. Have the government and the relevant state agencies heeded the warnings? Unfortunately not.

The BDDK has defended its actions recently in court, arguing that Bank Asya is a relatively small company and that its treatment of the bank will not cause any disorder in the financial sector. The agency must have forgotten that when it comes to injustice nothing is small. A fly is small, but a fly in the ointment is enough to make you sick. The actions of the BDDK have, and will continue to have, wider repercussions.

In the eyes of foreign investors, these actions, in which the Savings Deposit Insurance Fund (TMSF) is surely complicit, are an indicator that the rule of law in Turkey is hanging on by a thread. All companies are on thin ice.

You don't need to have anomalies in your management or financial statements. Even if your company is perfectly managed and all of your records are well kept, you are still not immune from an intrusion by state agencies if your partners are somehow in conflict with the government or those favored by the president. The government is, ironically, dragging the nation into chaos and anarchy.

Last week, I was talking to a businessperson working with several well-known foreign companies for their domestic operations. She said one of her company's clients in the energy sector had been going through a court process for two years regarding a conflict with a Turkish company. When the government removed hundreds of prosecutors and police officers to save itself from serious corruption investigations, the progress made in the court case over the last two years was lost when the new prosecutors decided to start the case again from scratch. The company's managers were quite upset.

Deputy Prime Minister Ali Babacan, whose presence in the Cabinet is usually perceived as insurance against the government's deviation from what is reasonable, last week pointed to the perils of unpredictability and high-handedness as he reiterated his warnings that the rule of law is of utmost importance for an economy and that a nation cannot prosper without a strong democracy.

Babacan was speaking by the book, but not from his heart. I used to have great respect for him, but now, after seeing his passive behavior when faced with authoritarian policies, corruption and the blatant lies of some of the members of his government, I've begun to see his presence as nothing more than a sedative.

In any case, although his words have contradicted his actions, Babacan's soporific remarks about the rule of law are surely correct, while awfully disingenuous. To earn back trust and respect, he must take the first step to stop the fraudulence against Bank Asya. However, I am afraid that no one in the Cabinet is brave enough to stand against the injustice.

Published on Today's Zaman, 30 April 2015, Thursday