Cancellation of Bank Asya's license starts its liquidation process
by Daily Sabah
ISTANBULJul 26, 2016 - 12:00 am GMT+3
by Daily Sabah
Jul 26, 2016 12:00 am
The Savings Deposit Insurance Fund (TMSF) yesterday clarified that the cancellation of Bank Asya's license to operate means the process for the liquidation of the bank has started.
Bank Asya, which was taken over last year in May by the TMSF, had announced last weekend that the Banking Supervisory and Regulatory Authority (BDDK) lifted its official authorization to operate, relying on 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.
The tender for the sale of Bank Asya's shares had been scheduled by the TMSF on July 15; however, no bid was offered for the tender. Upon failure of the bank's sale in spite of the works conducted, as previously announced, the Fund Council took the next step to determine the fate of Bank Asya, deciding to temporarily freeze bank operations effective on Monday last week 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, its maladministration and operations pose risks to depositors as well as to 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 at least 208 people dead and 1,491 injured.