Turkish opposition leader says CHP to keep bank shares despite Erdoğan comments

Turkey’s main opposition leader Kemal Kılıçdaroğlu said on Monday his Republican People’s Party (CHP) would not give up its shares in İş Bank, one of the countries biggest banks, the Sözcü newspaper said.

Kılıçdaroğlu was responding to comments made on Sunday by President Recep Tayyip Erdoğan, who implied that the CHP should hand over the nearly 30 percent of the shares it holds in İş Bank to the Treasury. Kılıçdaroğlu said the CHP was not a “partner of İş Bank,” adding that it was a “good thing” that Erdoğan had pointed out that the CHP earns no profit from the bank.

He also took aim at Erdoğan saying, “I wonder if he’s considering transferring it [İş Bank] to the Wealth Fund?” in reference to Turkey’s largely unaccountable sovereign wealth fund to which Erdoğan appointed himself chairman on Sept. 12, having sacked the previous board.

Kılıçdaroğlu also stated that the CHP is the representative of the stake of Turkey’s founder, Mustafa Kemal Atatürk, does not benefit financially from the holding and plays no role in the bank’s decision-making.

Kılıçdaroğlu urged Erdoğan to respect the memory of Atatürk, adding that dividend revenues from the İş Bank shares are given to the Turkish Linguistic Society and the Turkish Historical Society, in line with the wishes of Atatürk.

Shareholder information on the bank’s website backs up Kılıçdaroğlu’s assertion.

İş Bank also released a statement on Monday stating that the issue relating to the CHP’s ownership of shares in the bank had been taken to court many times and that no changes were necessary since it had no effect either on the bank’s functioning or the CHP’s revenue.

İş Bank, Turkey’s biggest listed lender by assets, slid in İstanbul trading after President Erdoğan suggested stake controlled by the CHP should be handed over to the Treasury. Shares in the company dipped 3,9 percent to 3,98 Turkish lira at 2:18 p.m. in İstanbul, just off a low for the day of 3,95 Turkish lira.

Erdoğan said no political party had the right to own interests in non-government banks in Turkey. The comments, which he made to journalists on his return from a trip to Azerbaijan, came as the country’s financial sector comes under pressure from a growing pile of bad loans swelled by a slump in the lira’s value and a slowdown in economic activity.

“It owns 28 percent of İş Bank shares. It can’t earn profits from them, but it has four board members. What do these four members do? This must be investigated,” Erdoğan said and added, “If the assets of Atatürk come under the auspices of anything, it should be the Treasury, not the banner of a political party.”

The decline in Işbank’s shares helped push the main banking index in İstanbul down by 2 percent to 98,639 points in İstanbul trading.

Last week, Erdoğan appointed himself head of the country’s sovereign wealth fund, which controls assets previously overseen by the Treasury and parliament including government stakes in two state-run banks and Turkish Airlines. Berat Albayrak, Erdoğan’s son-in-law and treasury and finance minister since July, has been made deputy chairman of the fund.

The CHP’s shares in İş Bank were once transferred to the Treasury following a military coup in 1980, but the party won a court case to get them back, Kılıçdaroğlu said. Erdoğan should look at the legal history regarding the stake, he said.

It is not the first time the CHP’s stake in İş Bank has become the subject of controversy. In 2016, one of Erdoğan’s advisers called for the bank to be nationalized after Kılıçdaroğlu called Erdoğan a “tin-pot dictator.”

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