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Erdoğan’s secretive petrochemicals business with Iran

PHOTO: Atlantic Council

Cevheri Güven

Over the years the government of Turkish President Recep Tayyip Erdoğan has been involved in many domestic corruption allegations. In addition to that, his government’s name recently began to appear in international money laundering schemes; in undisclosed trade deals with countries like Qatar, Indonesia, and Iran; and even in alleged cocaine trafficking. Yet none is so shrouded in mystery as the Turkish company Gübretaş’s investment in Iran.

In 2008 the company invested $681 million in Iran, in the largest foreign acquisition in Turkey’s history. The opposition’s inquiries about it have been left unanswered by the government, which cited confidentiality.

Gübretaş A.Ş. was established in 1952 under a cabinet decree, with the aim of manufacturing agricultural fertilizer. In 1993 the company was privatized and acquired by the Agricultural Credit Cooperatives of Turkey, an entity whose membership comprises farmers and whose management is generally influenced by the Ministry of Agriculture. While the institution normally had a certain autonomy from the government, under Erdoğan’s leadership it was subjected to greater government control.

In 2008 the company decided to extend its operations abroad by acquiring Razi Petrochemical Co, Iran’s fertilizer producer that was being privatized, for $681 million. According to Gübretaş’s records, another $150 million in funds was subsequently transferred to Razi Petrochemical Co after the purchase.

Due to its investments in Iran, Gübretaş has been placed under scrutiny and restrictions in several US states.

Gübretaş carried out the purchase through a consortium consisting of two subsidiaries. When lawmaker Mehmet Ekinci in a parliamentary question requested the details of the consortium that purchased the Iranian petrochemicals company, the Ministry of Agriculture refused to answer, citing trade and state secrets. Ekinci submitted a second inquiry, stating that the secrecy argument was invalid, to no avail.

Two firms that are kept secret

Journalist Adem Yavuz Arslan, who has been following the issue, believes that Erdoğan’s associates are involved in this largest foreign acquisition in Turkish history, which was pursued despite sanctions in some US states.

Arslan claims that the two firms undisclosed by the Ministry of Agriculture are Asyagaz and Tabosan. He says Asyagaz was set up just 20 days before the acquisition and that Tabosan is a company that was bankrupt.

“Two companies, one of which was established 20 days ago and the other [bankrupt], took out loans amounting to tens of millions of euros from state-owned Vakıfbank and Halkbank, for the Razi Petrochemical Co’s acquisition,” Arslan says. “The reason the companies’ names are not disclosed under the pretext of confidentiality is the obscure background of their owners.”

Asyagaz’s most important shareholder is İhsan Arslan, a man with ties to Iran considered by many in Turkey as one of Erdoğan’s financiers. His son, who officially has the same name as his father but uses the alias “Mücahit,” is a figure personally close to Erdoğan.

Asyagaz’s other partner is Hakkı Selçuk Şanlı, the perpetrator of one of the most critical political assassinations in Turkey’s recent history. Arrested for his involvement in the murder of investigative journalist Uğur Mumcu, who was killed in 1993 by a bomb that was placed on his car, Şanlı was sentenced to 12 years, six months in prison.

Another significant detail about Şanlı is that he is a relative of Faruk Koca, the owner of the house in which Erdoğan lived for years as a tenant before the construction of his current lavish palace. After taking office as prime minister in 2002, Erdoğan had moved to Ankara and his choice to stay in Koca’s house was debated for a long time.

Erdoğan’s soft spot

At this juncture, an Iran-related terrorism investigation becomes significant: the Selam Tevhid file. The alleged terrorist organization was accused of orchestrating the assassination of secular journalists such as Mumcu, Bahriye Üçok, Ahmet Taner Kışlalı and Muammer Aksoy.

 The investigation had gained momentum around 2012 and 2013 after Kamile Yazıcıoğlu, the wife of alleged member of the organization Hüseyin Avni Yazıcıoğlu, had submitted documentation to the police following a dispute with her husband. Ahmet Yazıcıoğlu, the son of Hüseyin Avni Yazıcıoğlu who was a key name in the investigation, was put into a sales position at the Iranian fertilizer company after it was acquired. The investigation had also revealed that father and son Yazıcıoğlu both had close relations with Erdoğan’s landlord, Faruk Koca.

When the İstanbul police brought the Selam Tevhid case before the prosecutor, thereby revealing it to the public, Erdoğan’s reaction was intense. The police officers and prosecutors who were on the case were removed from their positions. Police chiefs in charge of the investigation such as Ali Fuat Yılmazer, Ömer Köse, Oktay Bulduk and Yurt Atayün as well as lower-ranking police chiefs were arrested, along with journalist Gültekin Avcı, who was closely following the case. İrfan Fidan, a prosecutor appointed by Erdoğan, ensured the acquittal of all Erdoğan associates who were involved in it while demanding aggravated life sentences for the police officers involved in the investigation on charges of attempting to overthrow the government. In the trial that was concluded in 2020, nine police officers were sentenced to life in prison. They are now in Silivri Prison in İstanbul, which is known for the severe isolation imposed on the country’s political prisoners.

According to journalist Arslan, Erdoğan’s retaliatory response to the investigation had to do with Gübretaş’s investment in Iran and the possibility that a series of hitherto unknown ties to Iran would be unearthed.

Numbers undisclosed

With its 2,700 employees, Razi Petrochemical Co is considered the largest fertilizer manufacturer in Iran and the Middle East. The firm’s director general is İbrahim Yumaklı, a pro-Erdoğan media executive who previously held positions at Al Jazeera Turkey and the state-run Anadolu news agency.

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