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<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\nTurkish Prime Minister Recep Tayyip Erdogan speaks during a meeting in Ankara, Turkey, Oct. 1, 2013.<\/p>\n
AP<\/p>\n
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- In Pictures\u00a0Turkey’s discontent<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n\n
A string of legal and administrative actions against\u00a0Turkey\u2019s largest business empire has led some to suspect a government vendetta, risking damage to the country’s investment-friendly reputation.<\/p>\n
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In Pictures\u00a0Turkey’s discontent<\/h5>\n<\/li>\n<\/ul>\n<\/div>\n<\/div>\n
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Koc\u00a0Holding, whose companies account for some 9 percent of Turkey\u2019s GDP, incurred the wrath of\u00a0Prime Minister Recep Tayyip Erdogan\u00a0when a\u00a0Koc-owned\u00a0hotel sheltered protesters fleeing from police during mass protests in\u00a0Istanbul\u00a0in June.<\/p>\n
Since then tax authorities have launched probes into two\u00a0Koc\u00a0companies, the government has cancelled a contract with one of its firms to build warships, and a university founded by\u00a0Koc\u00a0has been threatened with eviction over disputed back rent. Last month a lawyer filed a criminal complaint calling for an investigation into the company\u2019s possible role in the overthrow of Turkey\u2019s first Islamist government in 1997.<\/p>\n
While both Koc and\u00a0Ankara\u00a0deny any of these measures are politically motivated, analysts say the claims are tarnishing Turkey\u2019s business image at a time when the country badly needs more direct foreign investment.<\/p>\n
Since the start of May, the value of the Turkish lira has plunged 11 percent against the dollar, and the Istanbul stock market has lost 14 percent of its value as investors moved their money out of emerging markets like Turkey.\u00a0<\/b><\/p>\n
The currency slump has prompted fears over Turkey’s reliance on short term foreign debt. With economists warning that the country needs to attract longer term foreign investment in order to secure itself against the threat posed by further currency devaluations, many are worried about the government’s possible targeting of Koc.<\/p>\n
\u201cIt seems like revenge, and I believe it\u2019s\u00a0damaging the image\u00a0of Turkey\u2019s business environment,\u201d says Ugur Gurses, an economic columnist for the daily Radikal newspaper.<\/p>\n
\nRECOMMENDED:\u00a0Think you know Turkey? Take our country quiz.<\/p>\n<\/div>\n
Others\u00a0remain unconvinced that there is any vendetta. \u201cIt is a huge company with many different operations, so hard to say whether it is being disproportionately impacted by regulatory oversight,\u201d says Timothy Ash, head of emerging market research at Standard Bank in London.<\/p>\n
Whether or not Ankara\u2019s hand is truly behind the measures against\u00a0Koc, the perception is that it might be is adding to unease in the business community.\u00a0<\/b><\/p>\n
\u201cWhat we need is direct investment, not loans, and if the government is taking revenge against\u00a0Koc, this sends out a bad message for our future,\u201d says\u00a0Gurses.<\/p>\n
He believes the alleged targeting of\u00a0Koc\u00a0may fade away if more business-oriented minds in Ankara are able to appease Erdogan\u2019s anger against the group.<\/p>\n
Chain of events<\/h2>\n
The controversy surrounding\u00a0Koc\u00a0began when the Divan Hotel, close to Istanbul\u2019s Gezi Park, opened its doors to anti-government demonstrators fleeing tear gas and riot police on the night of\u00a0June 15.<\/p>\n
As scores of demonstrators sheltered in the lobby, including a German member of the European Parliament, riot police fired tear gas and a water cannon through its revolving doors. Although the hotel\u2019s management made the decision to shelter the protesters,\u00a0Koc\u00a0Holding, which owns the hotel, has supported the decision.<\/p>\n
The following day Mr. Erdogan, who has consistently portrayed the demonstrators\u00a0as violent and criminal, issued the first of a series of veiled threats against\u00a0Koc.<\/p>\n
\u201cWe know which hotel owners helped terrorists. Those crimes will not remain unpunished,\u201d he said at a rally of his supporters in Istanbul.<\/p>\n
The following month Turkey\u2019s finance ministry launched an investigation into TUPRAS, the largest\u00a0Koc-owned company and Turkey\u2019s sole oil refiner, and another\u00a0Koc\u00a0company, Aygaz, which sells liquefied petroleum gas.<\/p>\n
Soon after news broke of the investigations, Turkey\u2019s Finance Minister Mehmet Simsek denied they were politically motivated.<\/p>\n
\u201cThe Tax Inspection Board conducts 50,000 tax investigations every year. There is definitely no connection between the Gezi incidents and tax investigations,\u201d he wrote in a message on Twitter.<\/p>\n
Late last month a $2.5 billion contract to build six corvettes for the Turkish Navy given to another\u00a0Koc\u00a0subsidiary, RMK Marine, was unexpectedly canceled after it was awarded in January. The cancellation came after a rival firm that had been excluded from the bidding process filed a complaint with a business standards council within the prime minister’s office claiming the tender had been unfair.<\/p>\n
Meanwhile, Turkish media also reported last month that the Ministry of Forestry is preparing to evict a university\u00a0run\u00a0by\u00a0Koc from land\u00a0the ministry claims to own\u00a0for failing to pay disputed back rent of about 20 to 30 million Turkish lira ($10 million to $15 million).<\/p>\n
The measures evoked comparisons with another incident of alleged government bullying of big business: a $3.8 billion tax fine levied against the Dogan group in 2009.\u00a0The fine came after newspapers belonging to Dogan, which owns the country\u2019s largest media empire, took an aggressively negative line against Erdogan\u2019s Islamist-rooted government, and the prime minister publicly rebuked owner Aydin Dogan.<\/p>\n
A clash of power players<\/h2>\n
In an interview on Turkish television last month Koc Holding chairman\u00a0Mustafa Koc, at once dismissed claims that his company was being targeted, but simultaneously defended his hotel’s ‘humanitarian approach’ during the protests.<\/p>\n
\u201cAny change [in our investments] or cancellation [in our contracts], to date, is the subject of mere speculation. We want nothing to do with this,\u201d he said.<\/p>\n
Koc Holding, founded by Mustafa’s grandfather Vehbi Koc in 1926, is among a clutch of family-owned business empires that make up Turkey\u2019s secular aristocracy.<\/p>\n
While they retain much of their former economic clout, the political influence they once enjoyed has reduced dramatically over the past decade in which Erdogan\u2019s Justice and Development Party has governed Turkey.<\/p>\n
The newly affluent pious class that has flourished under Erdogan views this old elite with bitter resentment, referring to them by the derogatory term “White Turks” and accusing them of complicity in past state repression of devout Muslims.<\/p>\n
On Sept. 16, a lawyer in the conservative city of Erzurum filed a complaint against\u00a0Koc\u00a0Holding and Dogan, calling for both to be added as suspects to a criminal case into the fall of Turkey\u2019s first Islamist government in 1997. The trial involved more than 100 military officers accused of using covert pressure to engineer the overthrow of Prime Minister Necmettin Erbakan, an episode now referred to by most Turks as the “postmodern coup.”<\/p>\n
The complaint was filed the day after Erdogan made a speech in which he seemed to call for the prosecution of business and media groups he said were involved.<\/p>\n
\u201cWasn\u2019t there a contribution of conglomerates to [the 1997 coup]? Wasn\u2019t there a contribution of print and visual media? I\u2019m astonished that they aren\u2019t on trial. I wonder why they aren’t called to account,\u201d he said in a speech to industrialists in Istanbul.<\/p>\n
Mustafa Polat, the lawyer who filed the complaint, told The Christian Science Monitor he had heard Erdogan\u2019s speech before acting, but was not influenced by it.<\/p>\n
\u201cKoc\u00a0and Dogan cooperated with the coup party and they took financial advantage of the situation,\u201d Mr. Polat says, adding that the companies are now being investigated by Turkey\u2019s financial crimes bureau.<\/p>\n
Polat is a complainant in the case because he graduated from a religious high school, and following the coup, legal changes barred graduates from these schools from training as lawyers, forcing him to study in northern Cyprus.<\/p>\n
\u201cIf it wasn\u2019t for the coup, I wouldn\u2019t have had to go there,\u201d he says.<\/p>\n
He added that at this stage it is not clear what penalty \u2013 if any \u2013 the companies could face. But he believes\u00a0Koc\u00a0deserves punishment regardless of the economic cost, using a Turkish saying: \u201cThe finger\u00a0feels no pain that is cut off according to\u00a0Sharia law.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
Turkey’s Koc Holding has been investigated repeatedly since helping antigovernment protesters this summer. Will that chill investment? By\u00a0Alexander Christie-Miller,\u00a0Correspondent\u00a0\/ October 8, 2013 Turkish Prime Minister Recep Tayyip Erdogan speaks during a meeting in Ankara, Turkey, Oct. 1, 2013. AP In Pictures\u00a0Turkey’s discontent A string of legal and administrative actions against\u00a0Turkey\u2019s largest business empire has led […]<\/p>\n","protected":false},"author":83,"featured_media":78343,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[846],"tags":[8286,1018],"class_list":["post-78342","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-koc","tag-recep-tayyip-erdogan"],"_links":{"self":[{"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/posts\/78342","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/users\/83"}],"replies":[{"embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/comments?post=78342"}],"version-history":[{"count":0,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/posts\/78342\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/media\/78343"}],"wp:attachment":[{"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/media?parent=78342"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/categories?post=78342"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/tags?post=78342"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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- In Pictures\u00a0Turkey’s discontent<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n