Convicted Banker’s Appointment at Turkey Bourse Opposed by EBRD

(Bloomberg) -- The European Bank for Reconstruction and Development is against Turkey’s appointment of a convicted banker as head of the stock exchange, saying it now has the right to exit its 10% stake in Borsa Istanbul.

“We were not consulted on the appointment,” Jonathan Charles, managing director for communications for London-based EBRD, said Tuesday. “We do not support it and we will be having further discussions with the Turkish authorities on this matter. We have the right to exit the investment.”

The EBRD’s announcement comes after Mehmet Hakan Atilla, the ex-deputy chief executive officer of state-owned lender Halkbank, was picked to oversee Borsa Istanbul. The executive was convicted by a New York court in early 2018 for helping Iran evade economic sanctions on billions of dollars of oil revenue. Atilla served 28 months and received a hero’s welcome from government officials on his release.

Treasury and Finance Minister Berat Albayrak announced on Monday that Atilla was chosen for the post, saying in a tweet that he was unjustly convicted.

EBRD bought its stake in Borsa Istanbul in 2015 for an undisclosed price with a view to exiting through an initial public offering. Borsa Istanbul’s IPO hasn’t happened since then. Turkey has been the biggest recipient of EBRD investments in recent years.

Atilla’s appointment comes less than a week after U.S. prosecutors brought a criminal case against Halkbank in what appears to be a reprimand for Ankara’s decision to send troops into Syria. In the indictment, the bank was accused of aiding a wide-ranging plot to violate prohibitions on Iran’s access to the U.S. financial system. Halkbank rebuffed the accusations.

©2019 Bloomberg L.P.

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