ECONOMY

Constitutional court suspends decision on Erdemir stake sale

ANKARA – Turkey’s top administrative court suspended a decision allowing the sale of a major stake in steel maker Erdemir, an engineers’ group said yesterday, dealing a new blow to the privatization process. There was no immediate comment from the court on the statement by the Chamber of Mechanical Engineers (MMO), a professional association which opened a case against the sale on the grounds that it was against public interest. The suspension would mark a further twist in the troubled bid to sell the company after army pension fund Oyak Group made the winning bid of $2.77 billion (2.20 million euros) for a 46 percent stake in Erdemir in October. Oyak took control of the company in February. The state Privatization Administration can appeal against the latest court ruling which was made in response to a decision by the High Board of Privatization (OYK) approving the sale. «The lack of a legal foundation for the sale of Erdemir has once again been proven with the suspension of the OYK decision allowing the sale,» said MMO Chairman Emin Koramaz. «This illustrates that hastiness has resulted in inadequate consideration for whether privatizations were in line with the public good,» he said, calling for the immediate implementation of the ruling. The court, the Council of State, had suspended the sale in April in a previous case opened by the same chamber after the Competition Board had given approval for the deal to go ahead. Analysts had said the grounds for that suspension were procedural and were not expected to result in the sale’s cancellation. On that occasion, the court suspended the sale because the Competition Board’s decision to approve the sale was made by a meeting of eight people, when it should by law be made by seven. Oyak took control of Erdemir in February after abandoning a deal with European steel giant Arcelor to buy the stake jointly to avoid procedural delays in the purchase. It then bought another 3 percent from state investment bank TKB for 151.5 million euros, and the deal included a 2.9 percent stake held by Erdemir as treasury stock, taking Oyak’s shareholding to over 50 percent.