Banking watchdog cancels Bank Asya's license to operate

Through the Public Disclosure Platform (KAP), Bank Asya, taken over by the Savings Deposit Insurance Fund (TMSF) last year, announced that the Banking Supervisory and Regulatory Authority (BDDK) lifted the official authorization of Bank Asya to operate in accordance with the decision given by the BDDK on Friday within the scope of Article 107 of the Banking Law. According to the article, the banks are given shareholder rights as well as management and inspection exceptions for dividend rights but it requires the bank's structure as a financial institution to be strengthened and restructured for any takeover, merger or acquisition to occur within, at the latest, one year's time, along with an additional three-month process to be initiated after the takeover has begun. Otherwise, the Fund Council cancels the bank's license to operate. Meanwhile, the Borsa Istanbul stock exchange (BİST) management announced on Friday that Bank Asya's shares in BİST will remain closed to transactions for a minimum of six months.

Until the bank's sale was realized, Bank Asya's shares were initially closed to transactions on July 15 when the tender for the sale of Bank Asya's shares was scheduled by the TMSF; however, no bid had been offered for the tender. Upon failure of the sale, as previously announced, the Fund Council took the next step towards deciding the fate of Bank Asya, deciding to temporarily freeze bank operations effective on Monday when markets opened following the failed coup attempt on the night of July 15. On May 29, 2015, the BDDK ruled for the complete TMSF takeover of all shares of Bank Asya, which was believed to be the main financial institution for the controversial Gülen Movement and affiliated companies, due to the bank's failure to fulfill its obligations under the scope of Article 70 of the Banking Law that regulates the BDDK's intervention in troubled banks. The BDDK added that the trouble in Bank Asya's financial structure, administration and operations pose risks to depositors as well as the security and stability of the financial system.

The Gülen Movement is accused of infiltrating state institutions through large-scale cheating and nepotism with aims to topple the democratically elected government through investigations launched by members who had infiltrated the police and judiciary and prepared investigative files based on fabricated evidence and illegal wiretapping. Moreover, the failed coup attempt was realized by military officers loyal to the U.S.-based fugitive imam, Fethullah Gülen, to unseat President Recep Tayyip Erdoğan, leaving 208 people dead and 1,491 injured.