Shares of Turkey’s Halkbank sink after executive arrested in US
March 29 2017 10:15 PM
Halkbank headquarters are seen in Ankara (file). It’s Turkey’s fifth-largest listed bank by assets.


Shares of Turkish state lender Halkbank were heading yesterday for their biggest one-day fall after US prosecutors charged a senior executive with participating in a multi-year scheme to violate sanctions against Iran.
Halkbank, Turkey’s fifth-largest listed bank by assets, confirmed deputy general manager Mehmet Hakan Atilla had been detained in the US and said it and the Turkish government were looking into the matter.
The 47-year-old is accused of conspiring with wealthy Turkish-Iranian gold trader Reza Zarrab to conduct hundreds of millions of dollars of illegal transactions through US banks on behalf of Iran’s government and other entities in that country.
“Our bank and relevant state bodies are conducting the necessary work on the subject and information will be shared with the public when it is obtained,” Halkbank said in a statement.
The arrest escalates a case that has added to tensions between the US and Turkey.
President Tayyip Erdogan has said - without elaborating - he believed US authorities had “ulterior motives” in prosecuting Zarrab, who was arrested in March 2016 in Miami.
Halkbank shares tumbled as much as 16% in early trade. At 1427 GMT, the stock was down 13.8% at 10.40 lira, on track for its biggest one-day fall since its May 2007 listing, according to Thomson Reuters Data.
The US complaint bears similarities to a 2013 Turkish investigation, which also named Zarrab and Atilla and which Erdogan, then prime minister, cast as a plot by his political enemies to undermine him.
In that investigation, prosecutors accused Zarrab, along with others, of having paid cabinet-level officials and bank officers bribes to facilitate transactions benefiting Iran.
The prosecutors were removed from office, police were reassigned, and the investigation was dropped after a court ruled evidence was not properly obtained. At least two of the prosecutors fled the country in August 2015 and are wanted by the Turkish authorities.
Zarrab has denied the charges in his case.
It was unclear whether Atilla, who briefly appeared before a US magistrate at a court hearing in New York on Tuesday, had hired a lawyer or made a bail application.
Foreign Minister Mevlut Cavusoglu said the case would be discussed with US Secretary of State Rex Tillerson when he visits Ankara today.
Halkbank said last year it had no connection with the US investigation into Zarrab.
In an email to Reuters in 2010, when the US blacklisted Iran’s central bank and a number of other Iranian financial institutions, Atilla rejected the suggestion that Halkbank had been involved in any improper activity.

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