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Billions of dollars changed hands after the 2016 coup

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Cevheri Güven

Sedat Peker, a mobster who for a while has been steering Turkey’s political debate with his bombshell revelations on YouTube and Twitter, has now set off a debate in the country over alleged state-led extortion of capital. Peker’s account points to a scheme employed in the seizure of billions of dollars after a failed coup in July 2016.

Having left Turkey and settled in Dubai following a conflict with President Recep Tayyip Erdoğan’s son-in-law, Berat Albayrak, Peker in his revelations has been targeting several heavyweights of Erdoğan’s government, in particular Interior Minister Süleyman Soylu. He recently triggered a new public debate by revealing information on the alleged use of state power to secure the forcible transfer of capital in the last few years.

The most striking example he gave was the takeover of Victoria Gardens, a mall in the Ukrainian city of Lviv, by Cihan Ekşioğlu, a figure close to Erdoğan and to Hakan Fidan, Erdoğan’s intel chief. Peker said the first step of the operation was the publication of a series of news reports in the government-controlled Sabah daily alleging that the then-owner, Aytaç Ocaklı, had links to the faith-based Gülen movement, which in Turkey is accused of orchestrating the 2016 coup attempt. The news reports rendered Ocaklı unable to return to Turkey out of fear that he might be arrested over the allegations. Later, the threat of prosecution was used to coerce Ocaklı to transfer to Ekşioğlu free of charge the ownership of the mall.

The mechanism that Peker was talking about is referred to in Turkey as the “FETÖ market” (FETÖ borsası in Turkish), based on the pejorative term “FETÖ” used in the country to describe the Gülen movement as a terrorist group. It consists of conducting a smear campaign in the pro-Erdoğan media against targeted businesspeople with alleged ties to the movement and then contacting them for a meeting, either in İstanbul or Ankara, where they are shown details of a criminal investigation file implicating them and are offered to have the charges dropped in exchange for part of their assets, ranging from 20 to 50 percent. If the victim refuses, prosecutors then decide to confiscate the entirety of their assets and have them arrested.

Billions of dollars extorted

Two groups working on property rights violations, London Advocacy and the Brussels-based Platform for Peace & Justice (PPJ), have estimated the total amount seized by the state from allegedly Gülen-linked individuals after the 2016 coup.

Their report, titled “The Erosion of Property Rights in Turkey,” includes a detailed analysis of the assets confiscated or transferred to Turkey’s treasury. According to the report, 998 companies were seized in the first week after the attempted coup, and 1,075 others were shut down with their assets being handed over to the Treasury. Ministry of Trade data put the value of the seized companies at $20.4 billion, while no official declaration has been made by the Treasury with respect to the value of the 1,075 companies whose assets were transferred.

Based on the value of real estate owned by the shuttered companies, the report estimates that their total value as of July 23, 2016 was $32.24 billion. The report points out that this estimate relies solely on construction expenditures and that it is impossible to put into numbers the companies’ brand value and commercial capacity.

While the report focuses on the seizures and shutdowns of the week that followed the failed putsch, the court-ordered seizures continued for years. The amount of assets extorted through methods explained by Peker, however, remains unknown.

Nihat Kilit is one of the businesspeople who lost their entire fortune. Formerly the owner of a factory manufacturing welding machines, Kilit lost the entirety of his assets during his 18-month-long pretrial detention. He says a trustee who was appointed by the court to manage his factory had sold all the equipment for overly low prices and that his company was driven into bankruptcy. Having fled to Europe after his release from prison, Kilit now lives as a refugee in the Netherlands.

“The trustee that was appointed to our factory completely gutted it. He transferred everything, including the R&D department, all the technical equipment and the workers to a newly established factory named Kolark, which was owned by the pro-Erdoğan Kolin Group. They are now manufacturing the machines that we had developed and for which we had the intellectual property rights,” Kilit says.

“This fortune was inherited from my grandfather and my father, and it hurts greatly to see it being destroyed. They arrested me on the charge of hiding Adil Öksüz, the alleged civilian number one of the putsch. I was tortured at the police station. I did not know Adil Öksüz, I was hearing his name for the first time. They took away my entire fortune in the 18 months I spent in jail. Yet, in the indictment drafted months afterwards, there was nothing about Adil Öksüz. The whole thing was aimed at extorting my assets.”

Owners of industrial giant Boydak behind bars for five years

One of the most significant private sector enterprises to be confiscated following the 2016 coup was Boydak Holding. At the time of the seizure, the corporation had a total of 13,240 employees. Now it is down to 12,232. Its two furniture brands, İstikbal and Bellona, accounted for 60 percent of the domestic market. The corporation also owned HES, an international cable manufacturer. The family company’s board chair, Hacı Boydak, and its CEO, Memduh Boydak, have been in jail since 2016. The Boydak family is accused of sitting on the board of trustees at the Gülen-linked Melikşah University. Since its management was taken over by the Savings Deposit Insurance Fund (TMSF), Boydak Holding’s name has frequently made the news with corruption allegations implicating its new administration. The younger members of the family often claim on social media that the corporation is being emptied and plundered.

A media boss wiped out

The seizures targeting Koza İpek Holding, which had investments in mining, tourism and media, began even before the 2016 coup attempt. The government-critical editorial line of the newspapers and TV stations owned by İpek Media drew Erdoğan’s ire, which led to the appointment of government-designated trustees, first to media outlets, and then to take over the entire corporation. The mines operated by Koza İpek were transferred to businesspeople close to the government, while the media outlets were shut down and their equipment sold. The corporation is believed to have been valued at about $10 billion.

Akın İpek, the board chairman, now lives in the UK. His mother, Melek İpek, and his brother, Cafer İpek, both of whom live in Turkey, have recently been sentenced to seven years, six months and to 79 years, eight months in prison, respectively, on charges of providing financial support to the Gülen group. Akın İpek has filed a lawsuit at the International Court of Arbitration. Turkey’s requests for his extradition have been rejected by the British judiciary.

According to Erdoğan, Gülen followers have no property rights

In December 2020 Erdoğan addressed the issue of property rights lawsuits filed by Gülen-linked businesspeople and rumors that Turkey might have to return their assets in the future.

“They [members of the Gülen movement] have no such thing as property rights. They have a huge price to pay,” Erdoğan said. “How is the individual who is now in England [Akın İpek] going to pay for all this? Why is he on the run? Then come back to your country. That is what we are and will keep fighting for.”

Ali Yıldız, a human rights lawyer based in Brussels, believes international courts will ultimately condemn Turkey over the asset seizures for violating the European Convention on Human Rights.

“The problem is, however, that very few rightful owners have lodged applications in due form,” Yıldız says. “This is a significant obstacle in the way of claiming one’s rights.”

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