Turkish business suffers under Erdogan’s post-coup Gulen purge


Date posted: November 7, 2016

Anthony Skinner

In early-November, Kemal Kilicdaroglu, the leader of Turkey’s beleaguered main opposition Republic People’s Party (CHP), spoke out against the confiscation of property belonging to businessmen facing terrorism charges.

The condemnation is just one part of the broader, albeit fruitless, criticism of the unstoppable President Recep Tayyip Erdogan.

Since July’s failed coup, which the government and most Turks believe was orchestrated by U.S.-based cleric Fethullah Gulen, Erdogan has used emergency rule to eradicate proven or suspected members of the Gulen movement and other voices of dissent. An estimated 37,000 individuals from all walks of life, including business, have been arrested and 110,000 sacked or suspended from their jobs.

Seizure of Gulen-linked businesses to bolster state finances

In typical fashion, Erdogan has not pulled his punches since the failed coup. Almost 500 companies with direct or indirect links to the Gulen movement have been taken over by the government-controlled Savings Deposit Insurance Fund (TMSF). The list of holdings and single-sector businesses includes such popular Turkish companies as Boydak, Koza Ipek, Naksan, Akfa and Kaynak. Having absorbed assets worth at least $13 billion, the state has become Turkey’s largest conglomerate. The proceeds from the sale of these businesses will go into state coffers.

Critics of the ruling Justice and Development Party (AKP) expect it to sell Gulen-linked companies to government allies in the business world at a large discount. In mid-October the AKP-linked Metro Holding applied to the TMSF to acquire all of Koza Ipek Holding’s shares. Akin Ipek, the fugitive former owner of the conglomerate, asked on Twitter how Koza Ipek’s $600 million in cash and $20 billion in mining assets could be acquired by a comparatively unimpressive entity. Metro Holding’s capital comes to just over $95 million.

Irrespective of whether or not the TMSF conducts the sale of Gulen-linked businesses in a transparent manner, business confidence has suffered. Thousands of corporate accounts have been frozen by Turkey’s banks as the state investigates these clients. Although seized entities are still paying their liabilities, the government has yet to announce a formal plan on how to manage the rights of business partners or lenders owed money.

Crushing potential threats without sinking the economy

Unlike Turkey’s media, the government is being fairly selective with the businesses it is targeting in the Gulen mop-up. The purge has expanded to include businesses with alleged links to the armed Kurdistan Workers’ Party, but not beyond. Turkey’s most important businesses, in particular heavyweights Koc Holding and Sabanci Holding, have not been touched during the purge. The former had been subjected to an aggressive tax probe and robbed of a tender for getting on the wrong side of the government during the anti-government Gezi Park protests of 2013. But none of its companies were taken over by the state and none of its managers were arrested.

Sabanci and Koc are unlikely to be targeted in the medium term at least given their lack of support for the Gulen network and their national economic clout. Snaring these business heavyweights would also tip the government’s already precarious balancing act – one designed to crush the remnants of the Gulen movement but not trigger excessive capital flight and a dramatic nose-dive in already subdued FDI. This task has been made all the harder with ratings agency Moody’s cutting Turkey’s credit rating to junk status in September after Standard & Poor’s pushed the country even further into negative territory in July.

Erdogan nonetheless dislikes that which he cannot control if not dictate. Therein lies the biggest risk for an economy which during the early years of AKP rule flourished at least in part from positive, pro-market reforms. Investors need to understand the rules of the game, but if those rules are increasingly being bent, changed or applied to punish rivals and suit Erdogan’s domestic agenda, business confidence will dry up.

Anthony Skinner is a director at political risk advisory company Verisk Maplecroft.

Source: CNBC , November 7, 2016


Related News

Nigerian govt demands immediate resolution from Turkey

The Federal Government of Nigeria is demanding an explanation and immediate resolution following the deportation of almost 50 Nigerian students at the Ataturk Airport in Turkey. Just after the coup, the Turkish Government had requested that 17 Turkish schools be closed down for their ties to the Gulen Movement and the Nigerian Government didn’t accept it.

OSCE: Excessive penalties threaten journalism in Turkey

Dunja Mijatovic, the Organization for Security and Cooperation in Europe (OSCE) representative on freedom of the media, has said excessive penalties against journalists may threaten investigative journalism and freedom of speech in Turkey. Mijatovic spoke against an investigation targeting Taraf journalist Mehmet Baransu for reporting on a confidential National Security Council (MGK) document that mentioned a planned crackdown on faith-based groups in Turkey.

Turkish schools issue [in Pakistan] still to be resolved

The official demand has now apparently been watered down to transfer ownership/administration of these educational institutions to the official Maarif Foundation tasked by the Turkish government to encourage foreign governments to seize other Turkish educational foundations operating in those countries, possibly targeting enterprises run by individuals close to US-based Islamic scholar Fethullah Gulen.

Human Rights Watch Director: This is a political purge… pure and simple!

Kenneth Roth, Human Rights Watch Director: No one pretends there were 90,000 coup plotters. This is a political purge, pure and simple. Erdogan’s Turkey.

Turkey coup: Conspiracy theorists claim power grab attempt was faked by Erdogan

Social media users have compared the coup attempt in which more than 160 people are thought to have died to the Reichstag fire – the 1933 arson attack on the German parliament building which Hitler used as an excuse to suspend civil liberties and order mass arrests of his opponents.

When nations spy on their nationals on foreign soil

The targeted Turks have lived in Nigeria for decades, with very high investments profile in the education, health and social sectors of the economy. They are involved in legitimate businesses duly registered and regulated by relevant agencies of government.

Latest News

Fethullah Gülen’s Condolence Message for South African Human Rights Defender Archbishop Desmond Tutu

Hizmet Movement Declares Core Values with Unified Voice

Ankara systematically tortures supporters of Gülen movement, Kurds, Turkey Tribunal rapporteurs say

Erdogan possessed by Pharaoh, Herod, Hitler spirits?

Devious Use of International Organizations to Persecute Dissidents Abroad: The Erdogan Case

A “Controlled Coup”: Erdogan’s Contribution to the Autocrats’ Playbook

Why is Turkey’s Erdogan persecuting the Gulen movement?

Purge-victim man sent back to prison over Gulen links despite stage 4 cancer diagnosis

University refuses admission to woman jailed over Gülen links

In Case You Missed It

Turkish gov’t pays cash rewards for arrest or death of Gülen supporters

Hizmet and countering violent extremism

Turkish experts and doctors seek asylum in Greece

Being the conscience of a nation

PakTurk School lauded for serving a wide range of students

Kerry Tells Turkish Foreign Minister Coup Accusations Irresponsible

Today’s Zaman Editor-in-Chief Bülent Keneş released pending trial

Copyright 2023 Hizmet News