Erdogan Purge Creates $10 Billion Bazaar for Would-Be Oligarchs


Don’t be put off by his conviction for inciting murder, Turkish bus baron Galip Ozturk says. That was just how the secret society that tried to overthrow President Recep Tayyip Erdogan once punished people who refused to pay up.

The 51-year-old founder of Metro Holding fled the country two years ago to avoid a life sentence he says was engineered by followers of Fethullah Gulen, the reclusive Islamic preacher who’s been holed up in a rural Pennsylvania compound since 1999. Ozturk was granted a new trial and flew home last month, after Erdogan purged more than 110,000 people from the public payrolls, including the judge and prosecutor in his case.

But the former tea server wants more than to clear his name. He’s among an emerging clutch of self-made businessmen who are virulently anti-Gulenist, deeply devoted to Erdogan and jockeying to take over some of the estimated $10 billion in assets that have been seized from suspected members of the cleric’s movement since it was designated a terrorist organization.

 “We are seeing a terrible plunder like the one that created the Russian oligarchs,” Seyfettin Gursel, an economist and co-author of the book “Growth and Structural Issues in Turkey’s Economy,” said by phone from Istanbul. “Only this time it’s private assets, not state assets, that will be transferred to businessmen close to the government. There’s no economic logic to it.”

Fearful Billionaires

Erdogan’s upheaval since July’s failed coup, which claimed more than 250 lives, has reached every corner of society. The Justice Ministry says 36,000 suspected Gulenists have been jailed so far, including scores of executives, sending ripples of fear through offices and trading floors. With Turkey under an extended state of emergency that allows rule by decree, many of the country’s richest men, not knowing whose assets may be targeted next, are either hunkering down, traveling abroad or going out of their way to show loyalty.

Aydin Dogan, a secularist billionaire, has already tamed the coverage at his vast media holdings, which include the Hurriyet daily and CNN-Turk channel, to avoid being closed or seized like more than 130 other outlets. He’s also started sponsoring anti-Islamophobia conferences in Europe and the U.S.

The wireless giant founded by communications tycoon Mehmet Emin Karamehmet, Turkcell Iletisim Hizmetleri AS, was once a cultural icon for westernized youth for its wildly popular “Free Girl” ad campaign that cheered individualism. Now he’s promoting Islamic education by funding students involved with the Ensar Foundation.

 And Ferit Sahenk, the billionaire chairman of Dogus Holding, was last seen in public almost a month ago, at the opening of the Islamic education faculty at Recep Tayyip Erdogan University, which he paid about $20 million to build in the president’s hometown of Rize in the northeast.

Neither Sahenk nor Karamehmet responded to requests for comment immediately, while a spokesman for Dogan’s group said his media outlets “continue their operations in line with Dogan broadcasting principles.”

These charitable investments fill a gap left by people like Koza Ipek Holding founder Akin Ipek, who built a university in Ankara before fleeing the country last year amid a crackdown on alleged Gulenists.

In September, the government seized 18 of Ipek’s companies, including three publicly traded units in mining and energy that once had a collective market capitalization of almost $6 billion. Ipek, 53, said from London that he’s built a conglomerate with $20 billion of assets by following the letter of the law and that he’ll sue Turkey in international court if they’re sold off.

“If they show even one illegal dollar in any of my companies, I will give them everything for free,” Ipek said by e-mail. “If they don’t, I’ll be obliged to use my international arbitration right — and that will be a headache for everyone.”

‘Anatolian Lions’

To Ozturk, the bus magnate, this post-putsch purge is part of a long-needed reshuffling of wealth and power that will tilt the balance away from “White Turks,” as the urban Republican elite are known, and toward “Anatolian Lions” like himself who are less cosmopolitan and more devout and nationalist.

“The White Turks can’t do what I did,” Ozturk said in his office in Istanbul’s financial district, describing how he moved to the city at the age of 13 to support his family in his native village and ended up starting a bus line that now carries 20 million passengers a year. “They only know how to transfer cash to secret accounts abroad. They are the real enemies of this country.”

Deputy Prime Minister Nurettin Canikli said last week that controlling stakes in almost 600 companies have been transferred to Turkey’s Savings & Deposit Insurance Fund, or TMSF, for allegedly aiding terrorism.

The fate of these shares will depend on the ongoing criminal investigations, he told parliament. If a terrorism link is established, then they’ll be sold, but if not, they’ll be returned to their original owners. A TMSF official put the value of seized assets at about 30 billion liras ($10 billion) and said the agency is still working on mechanisms for disposing of whatever it ends up with.

Hottest Stock

This lack of clarity hasn’t deterred Ozturk from starting talks with potential partners, including from the Persian Gulf, to bid for the largest group of companies seized so far — Ipek’s Koza holding.

With Turkish banks charging what Ozturk calls extortionate interest rates of as much as 19 percent, Metro, which has a market value of about $100 million, will need someone with deep pockets.

So far, investors are lining up behind the father of nine, whose formal education ended after fifth grade. Since he returned to Istanbul in early October and declared his interest in acquiring Ipek’s assets, Metro’s share price has almost doubled, the most in the Borsa Istanbul 100 Index.

‘Bring It On’

Ozturk dismissed Gulen’s denial of having any involvement in the putsch and said it would be poetic justice to acquire assets from his followers, recalling how the movement turned his life upside down five years ago, when he decided that what he thought was a patriotic group just wanted political power and refused to fund it any longer.

“I helped them for 22 years,” Ozturk said. “I gave lots of money because I thought they were promoting Turkey across the world. Then they said they wanted 6.5 million liras or they wouldn’t be able to restrain the organized-crime police from coming after me. I said, ‘Bring it on,’ and they did.”’

But his ambitions don’t end at taking over Ipek’s life work. He said he’d also “love” to acquire media assets to promote “the will of the nation” — as long as it pleases Erdogan. “I will not buy anything without Tayyip Bey being informed about it,” he said, using a term of respect for the president.

As for the retrial, Ozturk said he’s confident in the legal system now that Erdogan has flushed out most of the Gulenists.
“He’s the greatest leader in the 1,000 year history of the Ottomans,” he said.

Source: Bloomberg

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