The Turkish Wealth Fund has taken control of over 1,000 companies under the pretext of corruption.
Unprecedented are the prosecutions launched by the Turkish government against the country’s major entrepreneurs, with the state investment fund (TMSF) forcibly taking control of hundreds of private businesses.
This development has sparked concern over a potential seizure of assets that may be politically motivated.
The investigations and seizures have unsettled top business leaders in Turkey, while multiple theories have emerged regarding the motives behind these actions, particularly since President Recep Tayyip Erdoğan’s ruling Justice and Development Party (AKP) has previously used the TMSF to confiscate assets from its political opponents.
"The AKP has long used the TMSF both as a tool to regulate the economy and to direct resources to companies close to it, sidelining those it considered competitors," said Berk Esen, associate professor of Political Science at Sabancı University in Istanbul.
The government may now be attempting to “reshape who controls the economy, to redefine the structure of Turkish businesses,” Esen added.
Turbulence in the business sector
Among the most recent businesses targeted by investigations are Can Holding Group, glass and soda producer Ciner Group, and Istanbul Gold Refinery.
These investigations and seizures have dramatically increased the number of companies under TMSF control in just 12 months.
The TMSF, which operates as a manager for businesses during investigations, now controls 1,056 seized companies, up from 675 a year ago, according to fund data.
These companies cover almost the entire spectrum of the Turkish economy, from SMEs, financial services, and energy to the football club Kasımpaşa, Erdoğan’s own team.
The investigations and arrests have created uncertainty in the Turkish private sector, intensifying fears about the security of property rights and selective law enforcement by the courts.
Especially as Erdoğan is believed to want to extend his dominance in Turkey for another presidential term, after more than two decades of increasingly authoritarian governance.
Political motives and contradictions
Some analysts and members of the Turkish business community believe that the investigations and asset seizures aim to bolster the government’s image in public opinion by showing a tough stance against corruption.
The government seeks to demonstrate that Turkish courts are independent and that prosecutors do not politically target the opposition for criminal prosecution.
This theory was reinforced by the arrest of 19 well-known media personalities last week, who were accused of drug use; a move that some analysts described as “theatrical repression” to showcase the government’s determination to cleanse society of crime.
Political confrontation
However, there is also a darker possibility, according to analysts, that Turkey’s struggling economy has intensified Erdoğan’s party’s need to finance support networks ahead of the next presidential elections, scheduled for 2028.
"The informal fear among the business community is that the investigations are not an anti-corruption operation, but a full-scale attack on the business sector," said Atilla Yesilada, analyst at GlobalSource Partners in Istanbul.
Yesilada added that Erdoğan’s goal may be “to transfer capital either directly to the state through the TMSF, or to redistribute capital from business owners into loyal hands.”
The Role of the TMSF
The TMSF, originally established in 1983 to protect deposits in Turkish banks, took on a broader role after the failed coup attempt against Erdoğan in 2016, which resulted in the purge of thousands of public officials and the seizure of more than 1,300 companies linked to the coup attempt.
The new February legislation strengthened the TMSF’s legal framework, allowing for the seizure of businesses on the basis of “strong suspicions” of crimes such as money laundering, without requiring a court order.
With the escalation of anti-corruption attacks, entrepreneurs and analysts remain concerned about the political motivations behind these seizures and the potential future impact on Turkey’s economy.
Erdoğan’s message or political strategy?
The anti-corruption campaign in Turkey raises serious doubts and questions about the real motives behind these attacks.
"If I had to speculate, I believe Erdoğan is sending a message," said Wolfango Piccoli from the consulting firm Teneo. “There are no untouchables.”
www.bankingnews.gr
This development has sparked concern over a potential seizure of assets that may be politically motivated.
The investigations and seizures have unsettled top business leaders in Turkey, while multiple theories have emerged regarding the motives behind these actions, particularly since President Recep Tayyip Erdoğan’s ruling Justice and Development Party (AKP) has previously used the TMSF to confiscate assets from its political opponents.
"The AKP has long used the TMSF both as a tool to regulate the economy and to direct resources to companies close to it, sidelining those it considered competitors," said Berk Esen, associate professor of Political Science at Sabancı University in Istanbul.
The government may now be attempting to “reshape who controls the economy, to redefine the structure of Turkish businesses,” Esen added.
Turbulence in the business sector
Among the most recent businesses targeted by investigations are Can Holding Group, glass and soda producer Ciner Group, and Istanbul Gold Refinery.
These investigations and seizures have dramatically increased the number of companies under TMSF control in just 12 months.
The TMSF, which operates as a manager for businesses during investigations, now controls 1,056 seized companies, up from 675 a year ago, according to fund data.
These companies cover almost the entire spectrum of the Turkish economy, from SMEs, financial services, and energy to the football club Kasımpaşa, Erdoğan’s own team.
The investigations and arrests have created uncertainty in the Turkish private sector, intensifying fears about the security of property rights and selective law enforcement by the courts.
Especially as Erdoğan is believed to want to extend his dominance in Turkey for another presidential term, after more than two decades of increasingly authoritarian governance.
Political motives and contradictions
Some analysts and members of the Turkish business community believe that the investigations and asset seizures aim to bolster the government’s image in public opinion by showing a tough stance against corruption.
The government seeks to demonstrate that Turkish courts are independent and that prosecutors do not politically target the opposition for criminal prosecution.
This theory was reinforced by the arrest of 19 well-known media personalities last week, who were accused of drug use; a move that some analysts described as “theatrical repression” to showcase the government’s determination to cleanse society of crime.
Political confrontation
However, there is also a darker possibility, according to analysts, that Turkey’s struggling economy has intensified Erdoğan’s party’s need to finance support networks ahead of the next presidential elections, scheduled for 2028.
"The informal fear among the business community is that the investigations are not an anti-corruption operation, but a full-scale attack on the business sector," said Atilla Yesilada, analyst at GlobalSource Partners in Istanbul.
Yesilada added that Erdoğan’s goal may be “to transfer capital either directly to the state through the TMSF, or to redistribute capital from business owners into loyal hands.”
The Role of the TMSF
The TMSF, originally established in 1983 to protect deposits in Turkish banks, took on a broader role after the failed coup attempt against Erdoğan in 2016, which resulted in the purge of thousands of public officials and the seizure of more than 1,300 companies linked to the coup attempt.
The new February legislation strengthened the TMSF’s legal framework, allowing for the seizure of businesses on the basis of “strong suspicions” of crimes such as money laundering, without requiring a court order.
With the escalation of anti-corruption attacks, entrepreneurs and analysts remain concerned about the political motivations behind these seizures and the potential future impact on Turkey’s economy.
Erdoğan’s message or political strategy?
The anti-corruption campaign in Turkey raises serious doubts and questions about the real motives behind these attacks.
"If I had to speculate, I believe Erdoğan is sending a message," said Wolfango Piccoli from the consulting firm Teneo. “There are no untouchables.”
www.bankingnews.gr
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