ANKARA
Turkey's state-run lender Halkbank has said it is unfair and unlawful to link the bank in anyway with an investigation into an Iranian-born Turkish businessman in the U.S.
"In the past few days, some media organs, in line with an investigation conducted in the United States of America, have published extremely unfair, inappropriate, and unlawful news and comments against our bank, which has been operating since the foundation of the republic," Halkbank said in a statement to Borsa Istanbul, the country's main stock exchange, Monday afternoon.
Iranian-born Turkish businessman Reza Zarrab was arrested in the U.S. on March 21 on fraud and Iran sanctions-related charges.
Zarrab, 33, previously faced an investigation in December 2013 on charges of alleged illegal gold sales to Iran via Turkey, which resulted in his detention. The case against him was dropped in 2014.
Halkbank also said previously on March 22 that it had no connection with the ongoing investigation in the U.S.
"Our bank has no connection with the ongoing investigation. Not only is there not any inquiry related to our bank, our bank is not part of any inquiry or investigation," it said.
Halkbank share prices have fallen nearly 8 percent to 10.27 Turkish lira since Zarrab's arrest.
Halkbank is Turkey’s second-largest state lender after Ziraat Bank, with 900 branches and 19,000 employees.
In 2015, the bank’s assets were valued at more than 187.8 billion liras ($65.4 billion), an increase of 21 percent over 2014, and its net profits reached 2.3 billion liras ($801 million). Nearly half of Halkbank’s shares are traded on Borsa Istanbul.
The bank said its Iran-related foreign trade activities had been carried out legally since 2004 through a representative office.
- No international investigation
"Neither earlier nor within the 12-year period under the Halkbank name has there ever been an international investigation, inquiry or lawsuit against our bank over commercial relations with Iran, nor has negative feedback ever been received from any regulatory body," the bank said.
The bank added that during these 12 years there have been occasional changes in the international regulations. "The bank, evaluating such changes in constant consultation with foreign authorities and regulators, has accordingly restructured all its business procedures," Halkbank said.
"No dissonance or nonconformity with the related authorities has occurred within this period. No transactions involving prohibited parties, persons, or goods/services have been processed," the bank said.
"As per regulations, the U.S. financial system and USD currency have not been used for Iran-related trade transactions. Within this context, there is no justification for associating our bank with the transactions executed by persons or institutions whose names are mentioned in the indictment related to the investigation carried out in the U.S. It is also worth pointing out that our bank's name is not mentioned in the indictment in question," it added.
- Legal proceedings to begin
Since 2004, international banking giants such as Standard Chartered ($1 billion), HSBC ($1.9 billion), and France’s BNP Paribar’s ($8.9 billion) have paid penalties for violating U.S. sanctions against Iran.
Halkbank said: "Considering the large number of well-known global banks fined due to their transactions having been found to breach the sanctions in the past decade, this obviously reveals the position of our bank to be commendable. Therefore, the resumption of false news reports about our bank despite our previous statements is nothing but an assault on both our country and its economic values.
"In this respect, we bring to the public attention and inform our investors that legal proceedings will be commenced immediately against persons and organizations claiming such false news about our bank."
- ‘Unfair way’
“Going after this bank in such an unfair way will damage, especially tradesmen and entrepreneurs. The bank’s reputation should be protected against these speculations," said Murat Yulek, a professor at Istanbul Commerce University.
"State, public, and financial sectors should pay attention to the manipulation over Halkbank. The sharp decline in Halkbank’s shares might be the result of a deliberate conspiracy,” Yulek said.
“The public sector and the financial sector in Turkey have to be very well prepared for such an event. We need to be wary of speculations that could put a major bank such as Halkbank into jeopardy through a simple act," he added.
- ‘Meticulously audited banking sector’
Yulek said Turkey’s banking sector is one of most meticulously audited banking sectors in the world.
"Everything related to banks in our country is transparent. Each bank is audited by an international auditing organization. The Republic of Turkey has become such a transparent country that the occurrence of such an illegal incident through Halkbank seems very unlikely," he added.
"The reputation of the bank should be protected against these speculations. The reputations of banks all over the world are protected.
“Recently we had a similar situation in Greece. Protecting banks against speculative attacks is a fundamental principle. Because damage to banks due to missing, incorrect, or deliberately misleading information is a significant possibility," Yulek added.
- Either speculative or manipulative actions
Arif Unver of the Capital Market Investors' Association said short-term prices are heavily shaped by public perception and media reports.
"These may be either speculative or manipulative actions. If perception in the financial markets is further fueled by some effort for different purposes, this is of course a crime.
“And determining the nature of this act, whether it is speculative or manipulative, is the responsibility of the Capital Management Board [SPK]. Is there manipulation of Halkbank shares? We can only see the prices, but the SPK sees who buys or sells," Unver said.
