Azernews.Az

By Bloomberg

The Turkish government agency responsible for seizing assets extended its control over a bank it assumed management of last month.

The Savings and Deposit Insurance Fund, known as TMSF, will exercise non-dividend ownership rights to the class-A Bank Asya shares belonging to Surat Basim and Forum Insaat, two companies owned by Kaynak Holding, the banking regulator said in a statement to the Istanbul bourse on Wednesday.

TMSF took over management control on Feb. 3 of 63 percent of Bank Asya’s privileged shares, citing violations of banking regulations on transparency in its organizational structure. The shares seized from Kaynak Holding were previously transferred to Netherlands-based INL Partners BV, a move that wasn’t approved, the statement signed by the regulator’s acting head Mutalip Unal shows.

The seizure of Bank Asya last month followed a year of regulatory action against the Istanbul-based Islamic lender, which before the turmoil began was the country’s biggest. The bank was started by the followers of Fethullah Gulen, the U.S.- based Muslim cleric who is locked in a feud with Turkey’s President Recep Tayyip Erdogan, and many of those sympathetic to Gulen remain shareholders.

Standard & Poor’s said in a report earlier on Wednesday that the incidents surrounding Bank Asya illustrate the potential for political risk, or the perception of it, “to directly or indirectly spill over into the financial system.”

A Kaynak Holding spokesman said the company plans to make a statement about the regulator’s decision.