November 18, 2015

Critics of Kaynak raid focus on impaired investor confidence

The recent decision to place Kaynak Holding under administrative receivership has set off a chorus of reactions from economists and politicians, who have voiced their concerns over the shaken investment atmosphere in Turkey.

Ramazan Taş, the head of the economics department at Turgut Özal University and an analyst at the Ankara-based Center for Legal, Ethical and Political Studies (HESA), said such practices batter economic freedoms and the investment climate in the country.

World leaders at the G-20 summit held in Antalya over the weekend had just underlined their commitment to improving market conditions and helping the private sector boost investment, Taş said, adding Turkey, as the current rotating president of the G-20, is obliged more than the other members to comply with the commitment.

Former Capital Markets Board (SPK) President Professor Doğan Cansızlar said raiding private companies with water cannons and police forces will intimidate investors, adding the economy has already been struggling amid flagging export volumes.

Such practices discourage entrepreneurship in the country, Cansızlar added, saying the appointed trustees will be responsible for any losses recorded by the holding after the decision.

Democratic Left Party (DSP) Chairman Masum Türker, meanwhile, called the decision unfair, maintaining: “I wish they had displayed the same stance to the institutions that literally bankroll terrorist activities. I wish they had imposed the same practices on those who explicitly finance the terrorist Kurdistan Workers' Party [PKK].”

An İstanbul court on Wednesday appointed trustees to take over the management of Kaynak Holding and 23 companies under the conglomerate on suspicions of affiliation with the so-called “parallel state,” an infamous term invented by President Recep Tayyip Erdoğan to refer to sympathizers of the Hizmet movement, a faith-based community inspired by Turkish Islamic scholar Fethullah Gülen.

Mehmet Altan, a professor of economics at İstanbul University, in the meantime, said seizing investments via botched justifications will later cost the decision makers. “These [seized] companies also have foreign partners and they can appeal the decision. These companies also have foreign investments,” Altan pointed out, hinting at possible objections against the decision at foreign courts.

Altan said the decision was the latest move in what he called a fascist management. An Ankara court in October appointed trustees to Koza İpek Holding, accusing it of allegedly financing the “parallel structure” or what the court said was a “terrorist organization.”

Main opposition Republican People's Party (CHP) İstanbul deputy Eren Erdem said the appointment of trustees to companies critical of the government has become a common pattern, adding that this is a disgrace to Turkish democracy.

Sami Karahan, a professor of banking law at Marmara University, tweeted on Wednesday that the decision would target the whole economy.

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