September 17, 2015

TÜSİAD board member Boydak detained in latest wave of gov’t crackdown

Turkish police detained seven executives and university officials, among them a board member of the country's top business group, on Wednesday in Kayseri, in a controversial operation that critics describe as another sign of intensified government maneuvers targeting government opponents.

In a police operation in the central city of Kayseri, warrants were issued for the detention of 11 individuals and seven were detained. Among those detained was Memduh Boydak, a board member of the Turkish Industrialists and Businessmen's Association (TÜSİAD).

In reaction, TÜSİAD said on Wednesday it is disturbed and concerned that Boydak was detained, adding that he is a very respected and valuable figure in the business world. “We would like to underline that the severe allegations pose a major concern and [create] gloom in the business world, and [we] call for an end to this dark path,” TÜSİAD asserted in a written statement.

The detentions, as well as earlier raids on critical groups, arrive on the heels of the general election on Nov. 1 and the G-20 world leaders' summit under Turkish presidency in November. The operation targeted Melikşah University, a foundation university established in Kayseri in 2008, of which Boydak is the chairman of the board of trustees.

In a written statement on Wednesday, Melikşah denied any wrongdoing. Separately, Turkish main opposition Republican People's Party (CHP) leader Kemal Kılıçdaroğlu phoned Boydak Holding Vice Chairman Mustafa Boydak to express the CHP's concerns over the detentions.

The operation is likely to be seen as an attempt by President Recep Tayyip Erdoğan to crack down on his opponents less than two months before a snap election, Reuters said on Wednesday.

The Justice and Development Party (AK Party), which he co-founded, is looking to win back a single-party majority against a background of conflict with the terrorist Kurdistan Workers' Party (PKK) militants. The detentions follow raids earlier this month targeting other critical conglomerates including mining-to-media group Koza İpek Holding and Kaynak Holding, which is involved in publishing and logistics.

Back in January of last year, Erdoğan accused then-TÜSİAD Chairman Muharrem Yılmaz of "treason" for saying the government's efforts to reform the judiciary might unnerve investors and deter foreign capital from coming to Turkey. The timing of the raid is also crucial for domestic markets. Turkish financial markets have been rattled by the political uncertainty and security concerns.

The raid was carried out at the rector's building of the university, the first university in Kayseri to be privately funded by a foundation, early on Wednesday morning. Boydak was summoned by the police for questioning on the same day; however, he was taken into custody upon his arrival at the police station. According to allegations made as part of the investigation, the operation was launched over complaints about the expropriation of land adjacent to the university campus.

Boydak Holding is active in a number of sectors, including energy, furniture and banking. It is one of the largest conglomerates in Turkey and has 38 subsidiaries in eight sectors. According to its website, Boydak Holding has an annual turnover of more than TL 6 billion ($2 billion) and has more than 13,000 employees.

The company faced a round of tax audits when the vice chairman of its board criticized the government over political raids on Turkey's largest conglomerate Koç Holding's oil refinery Tüpraş in 2013. It then suffered from setbacks in its energy investments after the government in 2014 unlawfully canceled energy licenses that had already been approved.

Turkey's largest furniture maker, İstikbal, which has some 850 stores nationwide, is owned by Boydak Holding. Furthermore, six members of the Boydak family were at the top of the list of the 10 highest income tax payers in the province of Kayseri in 2014.

Fuat Avni, a Twitter whistleblower, who regularly reveals inside information that is allegedly from secret meetings of high-ranking government officials, claimed in a tweet on Tuesday night that the police would conduct an operation in Kayseri on Wednesday morning as part of a government-backed operation.

Boydak is one of Turkey's top taxpayers

Boydak Holding, one of the country's foremost companies, brought in TL 6.5 billion in revenue last year and employs 14,000 people. The company operates in 12 sectors including furniture, energy, banking and textiles with a total of 41 companies.

Six members of the Boydak family, which owns Turkish conglomerate Boydak Holding, were at the top of the list of the 10 highest income tax payers in Kayseri province in 2014, the deputy chairman of the group said in August. In a written statement early last month, Mustafa Boydak, who is also the chairman of the Kayseri Chamber of Industry (KAYSO), said he was the province's top taxpayer, contributing TL 1.8 million in taxes in 2014, and that five other family members joined him on the list.

“There is no room for modesty in taxpaying. This is also the most crucial indicator of our patriotism,” said Boydak. The Turkish public has become more aware of the importance of paying their income tax, Boydak said, but underlined that more still needs to be done to address the problem of tax avoidance. He also voiced his thoughts on the most common problems in the Turkish tax system, saying that “the share of indirect taxes in Turkey is much greater than in advanced economies.” Boydak also said he and his family will continue their philanthropic projects.

Following Mustafa Boydak on the list were Memduh Boydak, Bekir Boydak, Şükrü Boydak, Yusuf Boydak, Hacı Boydak, Mehmet İlgü, Hakkı İlgü, Metin Mergen and Ali Rıza Özderici. Mustafa Boydak had previously received an award from the Japanese Embassy for his contributions to economic relations between Turkey and Japan.

Reason behind raid irrelevant, university says

In a written statement from Melikşah on Wednesday, the university said the reason for the raid was due to complaints from landowners who claimed that their land was illegitimately expropriated to build the university campus.

However, the university said in its statement that no expropriation of any sort took place during construction. The university said the raid had nothing to do with the educational services of the school and it was an unlawful “perception operation” and “legal scandal.” It added that there was no proof whatsoever pertaining to the allegations. Reports on Wednesday pointed out that former Kayseri Metropolitan Mayor Mehmet Özhaseki was not investigated within the scope of the raid, despite the fact that Özhaseki and the Talas Municipality, where the university is located, initiated the approval for the land to be used as a university campus.

Published on Today's Zaman, 16 September 2015, Wednesday