Halkbank’s Former CEO Aslan Released After Corruption Arrest

Suleyman Aslan, the former chief executive officer of Turkish state-run lender Turkiye Halk Bankasi AS, was released from prison in Istanbul pending trial in a corruption investigation, his lawyer said.

Aslan, who was taken into custody after police raided his home on Dec. 17 and found $4.5 million stuffed into shoeboxes, was released without restriction on his movements, his lawyer Ersan Sen told reporters today. Sen had earlier said in an interview with Haberturk TV that Aslan would be “subject to judicial control.”

A graft probe into gold smuggling, bribery and rigging of state tenders resulted in the arrests of the sons of two government ministers, an Iranian-Turkish gold trader named Riza Sarraf and Aslan. Seven other suspects were released with Aslan today, while Sarraf and the ministers’ sons, Kaan Caglayan and Baris Guler, remain in detention, according to Sabah newspaper. Haberturk said that only five other suspects were released.

Aslan’s release won’t benefit Halkbank’s stock and “if anything, it just serves to remind investors of the potential pitfalls of investing in the company in the short term until the political and judicial turmoil in Turkey subsides,” Julian Rimmer, a trader at CF Global Trading UK Ltd, said by e-mail. “Large banks have immense strategic value in Turkey and Halkbank may yet find itself at the center of further controversy.”

Charitable Donations

Speaking outside the court in Istanbul today, Sen told reporters that his client should not be tried in the court of public perception. “We end up believing that someone in custody for a long time is guilty,” he said in a criticism of Turkey’s lengthy detention periods.

After Aslan’s arrest, Sen said that the money in the shoeboxes was for charity, and evidence to prove that had been submitted to the prosecutor, according to a report by Hurriyet newspaper on Dec. 21. Aslan said the $4.5 million was donations he’d gathered to help build Islamic schools in Turkey and Macedonia, Hurriyet reported citing Aslan’s police statement, which has not been made public.

Prosecutors Reassigned

Since the arrests, the government has replaced the prosecutors who were directing the investigations and reassigned about 7,000 police officers, according to CNN-Turk yesterday. Prime Minister Recep Tayyip Erdogan says the arrests are the work of a “parallel state” that is seeking to overthrow him under orders from U.S.-based Islamic cleric Fethullah Gulen.

The government is working to change the legal framework under which certain investigations proceed so that prosecutors require the approval of the governor, a political appointee, before they can order arrests or wiretaps, Radikal newspaper reported citing Erdogan on Jan. 31.

A spokesman for Halkbank said the bank was monitoring developments and may release a statement later today. Halkbank replaced Aslan as CEO with Ali Fuat Taskesenlioglu, according to a statement on Feb. 7.

Halkbank shares rose 3.1 percent at 3:49 p.m. in Istanbul, compared with an increase in the Turkish XBANK index of 2.7 percent. The shares have declined 25 percent since Dec. 16, the day before Aslan’s arrest, compared with a 17 percent drop in the benchmark Borsa Istanbul 100 over the same period.

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