NEWS

Turk mogul’s undoing

It’s a long, hot summer for Cem Uzan. The multibillionaire-turned-politician, these days, resembles an aetos horis ftera or, an eagle without wings. He lost two power companies, one bank and a majority stake in a foreign mobile phone operator; faced a slew of fresh criminal charges and a court ban on traveling abroad, a court decision to seize all his private property, and a 30-day broadcast ban on his several TV stations. And all that in just a month. Mr Uzan’s misfortunes began when he came close to buying Petkim, a state-owned petrochemicals giant which effectively controls most of the Turkish industrial apparatus. Now, with his hands tied tightly and unable to reach even his own money, Mr Uzan has failed to make a down payment for Petkim, which means the company will be put on sale once again. Mr Uzan – Prime Minister Recep Tayyip Erdogan’s major political rival according to opinion polls – is fighting a war too difficult to win. His major enemy is himself. Most of the Uzan empire consists of dubious business practices. Never in Turkish corporate history has a man behaved so aggressively and boldly. Mr Uzan’s business affairs are almost always associated with complex court cases. The man is a first-class expert in legal loopholes. Top management at Nokia and Motorola are still scratching their heads over how they have been ripped off, possibly through legal means, to the tune of $3 billion by a man with quite a notorious reputation. Dizzy from his victory in November’s general elections, Mr Erdogan possibly shrugged off Mr Uzan’s political ambitions. Mr Uzan won 7 percent of the vote only two months after he entered politics. But he became too dangerous to ignore when he made the highest bid for Petkim and opinion polls put his fiercely nationalist Young Party just behind Mr Erdogan’s Justice and Development Party. That was the beginning of a war Mr Erdogan has so far fought very smartly. The prime minister cleverly avoids open confrontation with the Uzan empire. For example, it was not the government but an autonomous energy market regulator which seized Mr Uzan’s two utilities along with 11 dams on charges of irregularities in corporate books and behavior. Similarly, it was an independent prosecutor who launched a criminal case against Mr Uzan when the crown prince of a Bosnian family called Mr Erdogan «treacherous» during a public rally. Another autonomous regulator, the broadcasting watchdog, banned Mr Uzan’s TV stations which repeatedly covered the public rally despite a court ban. Ostensibly, all of Mr Uzan’s misfortunes came from regulatory bodies autonomous from the government. There is not a single shred of evidence of governmental interference. The latest blow was no exception. Recently the banking watchdog, another autonomous market regulator, seized Imarbank, Mr Uzan’s financial arm, and its offshore subsidiary in northern Cyprus. And that really opened the Pandora’s box. The watchdog discovered stunning irregularities at Imarbank, although Mr Uzan’s top bankers had wiped out most of the bank’s records before they left it to the state administrators. The inspectors are still struggling to reach the bank’s database, part of which was also destroyed. They have found out that Mr Uzan did not register most of the deposit accounts his bank had collected. That way, the bank avoided having to deposit part of the money with the central bank and instead used it freely – mostly to finance Mr Uzan’s other businesses. Hundreds of thousands of depositors are now anxiously waiting to see if they will belong to a lucky minority. Although bank deposits in Turkey are under full governmental guarantee, the accounts with no trace could not be recovered. Mr Uzan apparently played another trick too. He created what independent auditors believe to be thousands of fake accounts – accounts under the names of his accomplices. That way, Mr Uzan thought, he could add to his illegal gains. Imarbank is a mess – hence the hundreds of demonstrators in front of the banking watchdog almost daily. Unconfirmed reports accuse Mr Uzan of having siphoned off up to $5 billion from his own bank. Mr Uzan awaits prosecution, along with his father and brother, on serious criminal charges. With all the evidence, it would be a near-miracle if he is still a free man in a couple of years. The family’s entire private property has been seized. The father and the two sons are not allowed to travel abroad. Separately, their 60 percent stake in a mobile phone operator in Kazakhstan has been seized too. But Mr Uzan seems quite indifferent. «You, Erdogan,» he said at a public rally last week, «you may ban me from traveling abroad but not at home. I was born here, have lived here and will die here,» he said to thundering applause from his party supporters. Strange that he still has public support. A recent public opinion poll puts Mr Uzan’s popularity at 14.4 percent against 7.1 percent last November. He probably needs to rip off more public money to boost his public support.