CATF Reports Jul. 19, 2016, 8:28am


With hardly coincidental timing, yesterday the Turkish Deposit Insurance Fund has announced the suspension of all banking operations of Bank Asya, a major Islamic lender established in Turkey in the late 1990s by Fethullah Gülen’s followers. On May 29, 2015 Turkey’s banking watchdog, the Banking Regulation and Supervision Agency, had ruled for the complete takeover of Bank Asya, alleging “unclear ownership structure”. The liquidation of the bank, supposedly justified by “lack of transparency in conducting business” and “irregular monetary transactions”, was announced about a year later, and was scheduled to take effect by the end of that month if its sale was not finalized on time. Today the Deposit Insurance Fund’s statement claimed that the final decision to suspend the bank’s operations is due to the fact that Bank Asya did not attract any bids by last Friday, although the Fund’s resolute provision ostensibly mirrors President Recep Tayyip Erdogan’s unrestrained purge of the Gülenist presence in the country’s judicial, military, and banking infrastructure following the failed July 15 coup.

The bank witnessed and suffered from the declining relationship between the two leaders, who were partners for many years before they were eventually embroiled in a spiral of mutual accusations which degenerated into a bitter feud in 2013. In 1996 Erdogan himself attended the inauguration of Bank Asya, one of the several Gülen related companies on Turkish soil. In fact, Gülen’s support for Erdogan’s government and party leadership was instrumental towards Erdogan’s consolidated political success. However, Erdogan’s increasing authoritarianism and the 2013 corruption scandal for which Erdogan blamed Gülen by framing it as a presumed attempt to depose him, marked a breaking point for that already strained alliance, which dramatically deteriorated until the March 2016 terrorist designation of the Gülen movement by Erdogan’s administration. Unsurprisingly, loans issued to Gülen’s affiliates started to be flagged as dubious transactions as Turkish authorities started to tighten their grip on the movement. Since 2013, Bank Asya’s asset base has progressively shrunk from its 2013 height of $13.2 billion, ultimately falling victim to Erdogan’s witch hunt.

From Anadolu Agency:

“Turkish regulators on Monday temporarily suspended Islamic lender Bank Asya's banking operations in the country, the Turkish Deposit Insurance Fund (TMSF) said in a statement.

The move came after the tender for the sale of the bank did not attract any bids on Friday, according to the Fund.

The tender was for the sale of a minimum 183.6 million ‘A’ group shares, amounting to 51 percent of the bank.”

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