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Local auto showrooms sustain losses when Kuwaiti-owned fleet leasing giant fails

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Fleetcorp, a giant car fleet leasing company in Turkey owned by Kuwaiti businessmen, has decided to discontinue its activities after its shares in Kuwait were assumed by creditors over unpaid debts, causing hundreds of auto showrooms in several provinces to suffer some TL 78 million ($15 million) in losses, the Hürriyet daily reported on Monday.

As a result of legal action taken by creditors, Fleetcorp’s properties are now being confiscated and seizure warrants have been issued on its many vehicles across Turkey, according to the report.

Besides leasing car fleets to clients, Fleetcorp was also selling cars returned from leases to auto showrooms through tenders. Some 300 auto showroom owners claimed they paid the company to purchase cars; however, the company decided to discontinue operations without completing the turnover of cars to the auto showrooms.

The showroom owners said they made payments to Fleetcorp without knowing that the cars were mortgaged due to the company’s unpaid debts. Representatives from the showrooms who showed up at Fleetcorp’s headquarters in İstanbul were unable to find any official to talk to, the report said.

They accused the company of halting its businesses in Turkey without giving notice to the business partners.

The report also pointed out that two months ago 75 percent of the company’s shares had been transferred to two Kuwaiti financial institutions and that the company CEO, Barbaros Çıtmacı, had resigned just weeks before the outbreak of the crisis.

Çıtmacı told Hürriyet that his resignation was due to the “uncooperative stance” of the new shareholders.

Also according to another report in Habertürk, Fleetcorp’s debt of near €300 million, which corresponded to TL 1.2 billion last year, has gone up to TL 1.8 billion now due to the nosedive in the value of the Turkish lira.

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