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The Man at the Heart of the Devil's Triangle: Erol Evcil

HDN | 11/7/1999 12:00:00 AM |

The key figure in the politics-mafia-state connection, Evcil, has been accused of many things: defrauding Is Bank for $300 million, having 'moneylender' Nesim Malki killed, having stockbroker Adil Ongen shot and wounded and placing the three planes he bought with bank loans at the service of a number of politicians, including Mehmet Agar and Mesut Yilmaz. He has reportedly built up a network of relationships extending all the way from mafia 'Godfather' Alaattin Cakici to Cavit Caglar, changed his surname

  • The key figure in the politics-mafia-state connection, Evcil, has been accused of many things: defrauding Is Bank for $300 million, having 'moneylender' Nesim Malki killed, having stockbroker Adil Ongen shot and wounded and placing the three planes he bought with bank loans at the service of a number of politicians, including Mehmet Agar and Mesut Yilmaz. He has reportedly built up a network of relationships extending all the way from mafia 'Godfather' Alaattin Cakici to Cavit Caglar, changed his surname to throw pursuers off his trail and has benefited from the protection of former police chief and provincial governor Orhan Tasanlar.
  • Evcil became a millionaire at the age of 25. By the time he was 30 years old his name was at the top of the police force's most wanted list. Now, at the age of 33, he faces a DGM trial
  • Unal Korukcu, who had reportedly been defrauded by Evcil, resigned as Is Bank director general and is now facing abuse of authority charges that carry a maximum prison sentence of five years
  • Businessman Cavit Caglar, a former minister, has been pushed to the brink of bankruptcy, having been compelled to sell his bank, his TV station and his factories. Helplessly trying to prevent his assets from being seized by legal authorities, he will be tried at a DGM if his name comes up in the deposition Evcil has made to the police
  • Orhan Tasanlar was replaced as Bursa governor, and one month after his replacement, Evcil was captured by the police in a house in Bursa, where he had spent the past 10 months in hiding
  • Alaattin Cakici is imprisoned in France, awaiting extradition to Turkey. Six of his hitmen in Turkey were killed at Istanbul's Bayrampasa prison. If he comes to Turkey and starts talking, many a politician and businessman will be in trouble
  • Not only was the bank inspector who unearthed Is Bank's irregular extensions of Evcil's loans -- which now amount to some $300 million -- unable to make his voice heard by the authorities for several years, he also ended up leaving his post. Together with Unal Korukcu, members of the bank's board of executives are suspected of being involved in a cover-up. Board members included two CHP representatives
  • Hikmet Ulugbay made use of the findings in the report prepared by the sworn-in auditors of the Prime Ministry and thus enabled the prosecutors to open a case against Is Bank executives. A while later, however, his pride was hurt by Mesut Yilmaz's serious accusations, and he tried to kill himself -- obviously seeing this as a matter of honor. He survived but stepped down as a member of Cabinet
  • The Prime Ministry Inspection Board report said that Evcil had obtained loans not only from Is Bank but also from 15 other banks and that he had obtained the services of four financial leasing companies and two factoring companies. According to the report Evcil's 'credit risk' rating soared from $3.6 million in 1994 to $140 million in 1995. Despite all this Evcil continued to obtain fresh loans from banks, which he used to pay the interest accrued on his previous debts. By 1996 his credit risk rating had risen to $232 million and by 1997, the time of his disappearance, to $284 million -- $245 million of which was owed to Is Bank
  • KEMAL BALCI

    Making a decision on an application it received on Aug. 27, 1994 a civil law court in Mudanya, Bursa, changed a man's surname to Esrefoglu. That was how businessman Erol Evcil got rid of the surname he had carried for 28 years. Since Evcil means "domestic" or "tame" in Turkish, he had asked the court to permit him to adopt a new surname, saying that the word was mostly applied to pet animals and sounded ridiculous as a man's surname.

    Yet even after his surname was officially changed, he continued to use his former name in all his official transactions and thus benefited from the fact that the man who went by the name of "Evcil" no longer existed, officially. The change of name had obviously been decided on from the very beginning as a deliberate attempt to thwart his creditors' potential attempts to collect the money he owed -- a sum which was to climb to billions of dollars over just a few years.

    The developments that led Evcil to change his name had begun three years earlier, when Mehmet Ertas, head of the Is Bank provincial branch in Bursa, wrote a letter to the bank's head office.

    Evcil had requested a TL 10 billion loan from Is Bank but found his request turned down. This state of affairs changed considerably, however, after Evcil set up a company in partnership with Mehmet Ertas's brother Halil Ertas and Burak Tiryakioglu, the son of Metin Tiryakioglu, chairman of the BASISEN labor union, which had a say in the management of Is Bank. Mehmet Ertas wrote a letter to the bank's head office, describing Evcil in the following manner:

    "Born in Mudanya in 1966 and a graduate of the Management Faculty of Uludag University, single, Erol Evcil finished high school top of his class and was number two in his class at university. He began his career at an accounting/insurance company."

    Almost every detail of the above profile was false. Evcil had never attended college. He did graduate from high school, but he was not top of the class. At the time the letter was sent he was nothing more than a student at the "open university." Furthermore, he was a draft dodger. His status as a student at the open university enabled him to avoid the draft. Furthermore, at that point in time, legally speaking, no person named Erol Evcil actually existed. According to the official records he was Erol Esrefoglu.

    In his letter, Mehmet Ertas praised Evcil in the following manner:

    "Encouraged by Mustafa Caglar [son of Bursa businessman and former minister Cavit Caglar] with whom he has a friendship dating back to their school years, he entered the wholesale textiles and yarn business via his initial company, Esrefoglu Sigorta Limited Sirketi [Esrefoglu Insurance Company]. In a short time he became one of the most popular faces in our city. Though all the banks in our city are trying to get him as a customer for their loans, he prefers to deal exclusively with our bank."

    Erev Tekstil, a subsidiary of Evcil's EZE Group, had an initial capital of TL 203 million and showed a loss of TL 47 million during its first year in business. Erev Tekstil requested a TL 10 billion loan from Is Bank. The bank had turned this request down two days before Mehmet Ertas sent the letter from Bursa to the Is Bank head office in Ankara. Yet, on Nov. 3, 1994, that is, two days after the initial loan request was turned down, Is Bank's Bursa branch extended Erev Tekstil a loan of TL 125 billion. On the date it received that loan the capital of Evcil's olive products company, Eze Zeytincilik, grew by TL 125 billion. At that time this curious coincidence escaped the public's attention.

    Thus, thanks to Cavit Caglar's son Mustafa Caglar, a small-scale, ordinary insurance man became a millionaire -- or, in terms of Turkish liras, a trillionnaire -- over a mere three years. According to official records he was a successful exporter. But closer inspection would have shown that the Eze Zeytincilik factory was still under construction in 1995, and that it only "seemed" that the plant was exporting its products. According to the official records the olives supposed to have been processed at the plant -- which was still under construction -- were being sold to foreign countries at a price of $4.43 per unit. Yet at that time olive exporters in Turkey could not even sell their products for $3.00 per unit.

    But this was not the full extent of the export hoax. According to the official records Eze Zeytincilik was also exporting wheat flour and livestock. It has remained a mystery how wheat flour could be produced and farm animals looked after at an olive processing plant. This too was left unquestioned.

    One of Eze Zeytincilik's foreign buyers, the Spain-based Meditoliva Almar, had paid out $1 million in February 1996 and another $1 million in June 1996, making both of these cash payments in advance. The products were never delivered, but the Spanish company did not make an issue of that failure to deliver. Curiously, Eze Zeytincilik operated not only as an exporter but also as an importer, and its leading foreign supplier was Yarki, a company based in Spain. In fact, it was based in Sevilla and had the same address and the same telephone numbers as Meditoliva Almar.

    Thanks to his political and bureaucratic connections Evcil continued to obtain millions of dollars of fresh loans from Is Bank. This went on until his debts exceeded $100 million and he proved unable even to pay the interest accrued on these debts.

    When the Is Bank inspectors got wind of the situation and started to dig deeper they saw that they were faced with fraud at an incredible scale. One of the Is Bank inspectors investigating the loans that Evcil had failed to repay, Ertugrul Sanem, came under pressure from the bank's higher executives. In his 300-page report he wrote that the bank's higher officials kept suggesting to him that when he completes his work, he must not put his findings "into effect."

    But by that time the process had begun, that is, Sanem had already begun to write the report. The higher bank officials started bargaining with Sanem, insisting that pages 29 and 30 in particular be omitted from the report. These were the pages referring to the names of the high-level bank officials who had committed irregularities to provide Evcil with loans, as well as the name of Evcil's partner, Burak Tiryakioglu.

    Sanem relayed a separate report to the bank's executive board, complaining about the pressure being exerted on him. The board members, however, did not review this complaint either, nor did they proceed with any form of legal action.

    When the Is Bank administration continued its efforts to conceal the Evcil issue and to dismiss the inspector investigating it, things reached the point where the public would hear about it. Sanem left the bank and filed a formal complaint with the Bursa prosecutor's office against the Is Bank administration. The loan irregularity thus became the subject of a court case. The Prime Ministry's Chief Inspector's Office started investigating the matter. The 48-page report prepared by these inspectors was presented to Hikmet Ulugbay, who at the time held the position of state minister responsible for the Treasury.

    Ulugbay made sure that the Is Bank executives in Ankara also found themselves as subjects of a court case. When the issue reached the court, Unal Korukcu, Is Bank director general for 15 years, unexpectedly announced his resignation. The facts behind the resignation were not disclosed to the public. The judicial process had begun. Meanwhile, the police had already been looking for Evcil for quite a long time because of a murder case in which he had been implicated.

    The 48-page report prepared by sworn-in bank auditors for the Prime Ministry Inspection Board showed that irregularities had been committed not only in extending loans but also in the way Is Bank had purchased Evcil's Eze Zeytincilik company as a consequence of his non-performing loans. According to the report, the factory, which Is Bank had supposedly bought for $47 million, had in fact cost the bank a lot more than that. The report also contained detailed information about Evcil's borrowing arrangements with 13 other banks and financial establishments.

    In addition to the controversial loans he had obtained from Is Bank, Evcil has been implicated in the murder in Bursa two years ago of businessman Nesim Malki, who was known as the "financier of the textile market." Following the Malki murder, former Prime Minister Mesut Yilmaz said, "TL 700 trillion changed hands overnight" -- a remark that indicated the terrifying size of the financial resources that had fallen under the control of the politician-mafia-bureaucrat network that came to be known as the devil's triangle.

    The Malki murder was not the first case in which Evcil's name had been mentioned, according to police records. He had earlier been implicated in the shooting and wounding of stockbroker Adil Ongen as the person who had allegedly ordered the attack. However, detectives of the Istanbul police force investigating the Ongen incident and the Malki murder met with an obstacle in the form of Orhan Tasanlar -- the chief of Istanbul police at the time. Despite their insistent pleas, Tasanlar did not permit them to detain and interrogate Evcil. Tasanlar was later appointed to Bursa as provincial governor.

    Another close relationship Evcil had formed was with "Godfather" Alaattin Cakici. This "duo" had become involved in the Turkbank privatization tender. Before this, they had played a part in the privatization of Sumerbank, ensuring that Hayyam Garipoglu got the bank. It has been claimed that Garipoglu bought Sumerbank on Evcil's behalf, and that the money came from Evcil. It has also been alleged that Evcil and Cakici tried to extort $20 million from businessman Korkmaz Yigit, who bought Turkbank when bids were invited to privatize it.

    Here is a breakdown by creditors of loans that Evcil has failed to repay, according to the sworn-in bank auditors report:

    Financial establishment Amount ($ million)

    Is Bank 35.1 Turk Ticaret Bank 74.4 Demir Bank 10.8 Demir Leasing 6.1 Atlas Factoring 4.3 Emlak Bank 3.6 Toprak Bank 1.1 Ege Bank 1.5

    Total 139.9

    According to the findings auditors, who are answerable to the Prime Ministry Inspection Board, the Evcil-related debts to Is Bank amounted to $245 million though in the table given above it seems as if Evcil owes the bank only $35.1 million. The figure of $245 was calculated by taking into consideration the cost of the factory which the bank took over from Evcil, $63.6 million, the $77.8 million debt ostensibly incurred by Antdemir, the $35 million spent in the course of Antdemir's capital expansion project, the $21 million which Antdemir owed to Is Bank's financial leasing facility, the $2.6 million the bank lost in potential interest earnings due to the fact that the loan the bank extended to Antdemir carried low interest, and the fact that the factory was mortgaged -- for a sum of $9.9 million -- to Turk Ticaret Bank, one the fellow creditors.

    The plane Evcil bought from Halit Cingillioglu, which now belongs to Demir Financial Leasing Company because Evcil failed to repay $6 million of his $9 million debt, has played a significant role in Evcil's network of relationships. The plane in question has reportedly been used by a number of leading politicians including former Prime Minister Mesut Yilmaz and former Interior Minister Mehmet Agar, who has been implicated in the Susurluk case.

    Evcil was caught by police at the upscale villa he had rented in Bursa, his hometown, to which he had secretly returned after fleeing abroad. He and his former business partners were detained, and the police spent a week interrogating him. He is now being interrogated by Istanbul State Security Court (DGM) prosecutors. The people he may have implicated in his deposition to the police and to the DGM prosecutors have hard times ahead of them. Considering the extent of his web of relationships and the significance of his connections, Evcil has the kind of information that could cause havoc in Turkey. If the Evcil investigation is reduced to a case of bank fraud and to a charge of simply ordering a murder, many politicians, bureaucrats and mafia members all around the country will heave a big sigh of relief. If not, then he will become a likely target for a fresh assassination, which could abruptly end an otherwise lengthy prison sentence. Evcil may be a new hope for those who want a "clean" Turkey -- or a defendant who will be silenced by the devil's triangle.

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