Relief in Sight for Turkish Firm Roiled by Thousands of Lawsuits
Relief in Sight for Turkish Firm Roiled by Thousands of Lawsuits
(Bloomberg) -- A Turkish company that faced potential ruin from a series of court defeats may get relief from lawmakers that could make the legal woes of Bera Holding AS go away.
Bera’s legal troubles stem from the late 1990s, when thousands of pious migrant workers in Europe handed over cash savings in return for stakes in the Konya, Turkey-based company, and other similar businesses. The payments were made as part of a system of faith-based investing prominent in the Anatolian peninsula. A court ordered Bera to refund the savers in 2017, saying they cannot be deemed shareholders.
A clause in a tax bill submitted to parliament last week stipulates that lawsuits launched against companies that raised funding from citizens will be dismissed. The bill aims to clarify the partnership structure of Bera, as well as Ittifak Holding AS and Umpas Holding AS, Capital Markets Board executive Faik Tiryaki said in parliament late Thursday.
Shares in Bera soared as much as 15% on Friday to the highest level since February, 2018. That extended gains over the past three weeks to more than 50%, outpacing all other stocks on the Borsa Istanbul 100 Index.
Read more: Court Defeats Stack Up for Turkey’s Troubled ‘Anatolian Tiger’
The company was forced to make payments of about 300 million liras ($52 million) to claimants over the past six years, according to Chairman Ali Riza Alaboyun. Bera still faces more than 2,200 lawsuits, while “thousands more are to come,” he told lawmakers, adding that companies cannot possibly meet the mounting obligations.
Insider Trading
The chairman cited the rally in the company’s stock on expectations that the issue will be resolved, particularly among foreign investors.
That prompted opposition politician Garo Paylan to say that he might file a complaint against the company because he suspects the proposed legal change may have been known beforehand by some investors.
If the law passes, the company would be able to borrow from banks more easily, Alaboyun told Bloomberg by phone on Friday. “We plan to distribute dividends in 2020,” he said. Rejecting Paylan’s accusations of insider trading, Alaboyun said the legal troubles of the company have been known for years.
To contact the reporters on this story: Firat Kozok in Ankara at fkozok@bloomberg.net;Taylan Bilgic in Istanbul at tbilgic2@bloomberg.net
To contact the editors responsible for this story: Onur Ant at oant@bloomberg.net, Vernon Wessels, Constantine Courcoulas
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