Turkey’s top business house in turmoil

After the recent police raid on an Istanbul warehouse, the net around one of Turkey’s most controversial political characters – and one of its most controversial business families – looks to be closing in.

Cem Uzan practises firebrand politics that makes the establishment uneasy
Cem Uzan practises firebrand politics that makes the establishment uneasy

Among the files picked through by detectives at Kok Construction – a company belonging to the controversial Uzan family – police allegedly found two surprising documents.


These were Jordanian passports registered in the names of Cem and Hakan Uzan – two of the family’s most powerful members.


While both are Turkish citizens, these passports appear to have been issued to them by the Jordanian authorities without the approval of the Turkish interior ministry.




If this is the case, then both Uzans will have committed a serious felony under Turkish law.


It would not be the first time the Uzans have faced the courts, with the alleged discovery coming after a long hard summer for them and their business empire.


Few seem to sympathise with the
Uzan family

 With the Uzan Group’s interests stretching from television and newspapers to electricity distribution, construction companies and a GSM network, until this year they had appeared unassailable as one of the country’s top business families.


But, in June, in a series of police raids, the authorities seized control of the Uzans’ two utility companies – Cukurova and Kepez Electric – alleging they had failed to honour distribution agreements.


Soon after, the group’s main bank, Imar Bank, was also seized, with allegations that it had illegally siphoned off deposits to fund other Uzan Group investments.


Not long after, Imar Bank’s sister-organisation, Ada Bank, was also seized on similar charges. Meanwhile, a New York court ruled against the Uzan’s GSM network, Telsim, in a US$4 billion fraud case brought by giants Motorola and Nokia.


At the same time, the Turkish broadcasting authorities imposed a one-month ban on the Uzan’s TV and radio stations for broadcasting what it considered offensive comments by Cem Uzan about Prime Minister Recip Tayyip Erodgan.


Political campaign


The Uzans hit back, arguing that the New York court had no right to try Telsim. They also alleged that the moves against them in Turkey were nothing more than a political campaign by Erdogan’s Justice and Development Party (AKP) government to discredit Cem Uzan’s party, by then number two in many opinion polls.


Prime Minister Erdogan is accusedof trying to discredit Cem

Prime Minister Erdogan is accused
of trying to discredit Cem

After failing to appear before the Istanbul court looking into the Imar Bank allegations, an Interpol “Red Bulletin” has now been issued for two members of the Uzan family – the patriarch, Kemal, and his brother, Yavuz.


This “all points” arrest warrant charges the two with a string of crimes, from concealment of evidence to major fraud.


Outside the support base of the GP (Young Party), few seem to have much sympathy for the Uzans.


They are known in Istanbul’s financial markets for rough tactics, with a use of intimidation that still leaves few market watchers willing to go on record.


Police raids on the Uzan Group headquarters have led to media revelations that the company safe contained 24 video tapes, 18 CDs and 73 audio tapes all believed to contain material used to blackmail business and political opponents.


The more salacious of these are already trickling into Turkey’s newspapers.


Meanwhile, what worries many analysts is the more practical impact of the Uzan Group’s collapse.


We think the size of the hole in Imar Bank’s deposits could be 10 times the total deposits the bank officially declared,” one financial analyst in Istanbul told Aljazeera on condition of anonymity.


Declared assets


With declared assets of $500 million, that makes for a massive hole, made up of bad loans to other Uzan group companies and enterprises.


We think the size of the hole in Imar Bank’s deposits could be 10 times the total deposits the bank officially declared”

Unnamed financial analyst

This poses a major problem now for the Turkish authorities. Under current Turkish law, the state issues a 100 percent guarantee for all bank deposits. This means if a bank goes under, the state picks up the tab, refunding all the depositors. If that amounts to $5 billion, it could have a seriously destabilising effect on the country.


It has also already led to calls for the 100 percent guarantee to be revoked


“That might create serious concerns among Turkey’s depositors, whose confidence in the banking system is already shaken,” said an analyst with Istanbul-based brokerage Bender Securities.


Meanwhile, as police continue the hunt for Kemal and Yavuz Uzan, it seems the net is now also closing in on Cem, whose firebrand style of politics may have finally sounded the death knell for the family empire.

Source : Al Jazeera

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