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Erdoğan accuses former allies of fraud over Halkbank in Şehir University saga: report

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Turkish President Recep Tayyip Erdoğan on Saturday accused allies-turned-rivals of defrauding the state-owned Halkbank in a controversy over the İstanbul Şehir University, Bloomberg reported.

Erdoğan leveled his claims as former Prime Minister Ahmet Davutoğlu and former economy chief Ali Babacan prepare to launch breakaway parties in an attempt to challenge the president’s 17-year-rule.

Erdoğan gave no evidence for his allegation that fraud tainted İstanbul Şehir University’s loan from Halkbank, which he said totaled TL 417 million ($72 million).

He also accused Babacan and another former economy minister, Mehmet Şimşek, of signing a suspect decree allocating state land to the university.

“Halkbank gave them a very large loan. They failed to repay it and requested a restructuring without offering any collateral,” Erdoğan said. “I don’t want to go into the details, but there was fraud against Halkbank.”

Davutoğlu was one of the founders of the university, which is struggling to repay the loan. Halkbank has taken the university to court trying to get the money back, and the school’s assets have been frozen.

Babacan, who served as deputy prime minister for the economy and foreign minister, severed ties with Erdoğan’s ruling Justice and Development Party (AKP) in July. Davutoğlu served as prime minister and chairman of the party from 2014 to 2016.

Davutoğlu denied the accusations and demanded that Erdoğan and his family declare their assets and any changes in their holdings in the course of the president’s political career. Babacan has not commented on the allegations.

In October US prosecutors charged Halkbank with taking part in a scheme to help Iran evade US sanctions and access $20 billion in frozen oil revenue.

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