Turkish bank ‘cannot deny knowledge of criminal charges’

Hakan Atilla, former deputy general manager of Halkbank and the new CEO of the Istanbul Stock Exchange, who served time in prison for violating US sanctions against Iran. (AFP)
Updated 06 December 2019

Turkish bank ‘cannot deny knowledge of criminal charges’

  • Halkbank charged with evading sanctions by processing billions in Iranian oil revenue

NEW YORK: A judge cited “extraordinary” and “remarkable” meetings two years ago involving top US and Turkey political figures to intervene in a New York prosecution as he rejected efforts by a state-owned bank in Turkey to now feign ignorance of criminal charges it faces in the same case.

US District Judge Richard M. Berman in Manhattan said that Halkbank, in effect, could be labeled a fugitive if it refused to send lawyers to represent it against the charges.

In a release, the bank said Halkbank is considering its options after the ruling and will aggressively defend itself against the allegations and seek Berman’s recusal.

“This Court has made statements both in and out of the courtroom that call into question the Court’s impartiality regarding key factual and legal issues relevant to the indictment,” Halkbank said. “Therefore, the Court’s continued supervision over this matter would cause an objective observer to have reasonable questions regarding the Court’s impartiality.”

The bank also said it has played a “vital and honorable” role in the Turkish economy for more than 80 years and “will continue its mission of supporting the development of the Turkish economy.”

At a hearing last month, Berman said that legal maneuvers by the bank were “kind of crazy” as its lawyers asked to challenge the right of an American court and Berman in particular to handle the case but refused to enter a plea on the bank’s behalf.

Halkbank was charged with evading sanctions against Iran by processing billions of dollars of Iranian oil revenue. An indictment said the bank illegally moved about $20 billion in Iranian oil and gas revenues, sometimes disguising money movements as purchases of food and medicine so they woud qualify for a “humanitarian exception” to sanctions. Although the bank was not charged until recently, the allegations involving it surfaced in 2015 when a wealthy Turkish-Iranian gold trader was arrested on sanctions charges as he arrived in the US to take his family to Disney World in Florida.

The trader, Reza Zarrab, hired Rudy Giuliani, the former New York mayor, to try to broker a deal between Turkey’s president and the US government to resolve the charges. The talks in 2017 failed to result in a deal.

In Thursday’s written ruling, Berman said that after Zarrab’s arraignment, “an extraordinary, sustained series of Turkey-initiated state-to-state meetings, contacts, and involvements began — outside the courtroom — between and among Turkish and US officials, lobbyists and attorneys.” Berman wrote that the objective of the campaign was initially to obtain the release of Zarrab, despite the criminal charges.

The judge said that the “remarkable campaign” involved Turkish President Recep Tayyip Erdogan, Turkish Justice Minister Bekir Bozdag, former Turkish Deputy Prime Minister Mehmet Simsek, Berat Albayrak — Erdogan’s son-in-law and Turkish minister of finance, and Turkish Minister of Foreign Affairs Mevlut Cavusoglu.

For the Americans, the talks included President Donald Trump, former Vice President Joe Biden, former Attorney General Loretta Lynch, ex-Secretary of the Treasury Steven Mnuchin and former Secretary of State Rex W. Tillerson, Berman said. Berman said the campaign to free Zarrab appears to have morphed into an effort to avoid Halkbank being indicted or paying a potential fine. “This effort appears to have failed prior to the Halkbank indictment on October 15, 2019,” the judge said.

The judge cited the fact that Halkbank paid for the lawyers for Mehmet Hakan Atilla, who was convicted of five of six criminal charges against him, including conspiring to defraud the US, bank fraud and conspiracy to violate sanctions against Iran. 

Atilla was sentenced to two years and eight months in prison. After his release from a US prison, he returned to Turkey, where he has since been appointed as the head of Turkey’s stock exchange, the judge noted.


Arabtec Holding said to hire AlixPartners for debt advisory

Updated 25 September 2020

Arabtec Holding said to hire AlixPartners for debt advisory

DUBAI: Dubai-listed contractor Arabtec Holding has hired advisory firm AlixPartners to help it restructure the company’s debt, two sources familiar with the matter said.

AlixPartners is assessing the company’s debt profile, before any potential discussions with Arabtec’s creditors, according to the sources, who declined to be named as the matter is not public.

Arabtec did not respond to a query for comment when contacted on Thursday. AlixPartners declined  to comment.

Arabtec Holding is due to hold a shareholder meeting on Thursday afternoon to decide whether to continue operating or liquidate and dissolve the firm after the pandemic hit projects and led to additional costs.

FASTFACT

 

Arabtec last month posted a first-half loss of 794 million dirhams ($216.18 million).

The company, which last month posted a first-half loss of 794 million dirhams ($216.18 million) and total accumulated losses of 1.46 billion dirhams, said on Sept. 9 that it was calling a general assembly under an article of UAE company law.

The law requires companies to vote on whether they should continue operating if their accumulated losses reach half of their issued share capital.

Shares of Arabtec Holding, which helped to build the Louvre Abu Dhabi and the world’s tallest skyscraper, the Burj Khalifa in Dubai, have plunged 56.7 percent this year. They were down almost 5 percent when a suspension of trading was triggered at 1 p.m. local time ahead of the meeting, which was being held in Abu Dhabi.

Several UAE companies have sought to extend debt maturities or agree better terms in recent years to avoid defaults, after an oil price crash hit energy services and construction.

This week, creditors started to enforce claims against Abu Dhabi-based Al Jaber Group, which has struggled since building up debt in the wake of a UAE real estate crisis and began talks with creditors in 2011.

Dubai-listed construction firm Drake & Scull is working under the UAE bankruptcy law to reach an agreement with its creditors in an out-of-court process.