Turkish bank and state agency settle $4 bln case

Turkish bank and state agency settle $4 bln case

Turkish bank and state agency settle $4 bln case

Mustafa Süzer, the former owner of the Kentbank, is glad that his damaged reputation is rebuilt, sources say.

The Banking Regulation and Supervision Agency (BDDK) and Kentbank have settled their dispute, with Kentbank withdrawing from a multibillion dollar case at the European Court of Human Rights (ECHR).

According to the agreement reached in the 10 year row, the BDDK will withdraw from cases against Kentbank’s owner, Süzer Group. In return, the group has agreed to withdraw from its $4.13 billion suit for damages at the ECHR and cease efforts to obtain a new banking license. The agreement is expected to lead to charges being dropped reciprocally.

Kentbank owner, Mustafa Süzer, has agreed not to apply for the return of the company’s banking license, or to apply for a new one. Süzer has decided not to return to the banking business and only wants to rebuild his damaged reputation, sources say.

Süzer Group had appealed to the ECHR in 2005, claiming the seizure of Kentbank by the BDDK during the 2001 crisis was unjust and demanding $4.13 billion in compensation from the Turkish government for its loss.

The court ruled last October that Turkey had violated the fair judgment and property rights clauses of the European Convention on Human Rights and that the confiscation of the bank was unfair. Denying $1 billion of the compensation request, the ECHR said it needed more time to make a decision about the remaining part and gave the Turkish government and Kentbank six months to reach a compromise to solve the issue.

Süzer said they believed that the dispute would be dissolved within this six-month period, adding that they did not and would not expect to receive any material compensation from the government as they had said publicly several times.

During the hearing of the case the BDDK presented against Kentbank on Jan. 4, BDDK representatives said they were considering withdrawing from the lawsuit and requested the trial be delayed. The court postponed the hearing to March 8.

Prior to that hearing, the BDDK revealed that it had decided to withdraw the written application. As BDDK representatives informed the court that the agency had withdrawn the written application, all the charges against the respondents are to be dropped.