EBRD sells Istanbul bourse stake after sanctions-busting banker becomes CEO

The European Bank for Reconstruction and Development (EBRD) sold its 10-percent stake in the Istanbul Stock Exchange to Turkey’s sovereign wealth fund after a banker convicted of breaking sanctions on Iran was appointed as the bourse’s chief executive officer.

The EBRD put the shares up for sale in October after Turkish Treasury and Finance Minister Berat Albayrak appointed Mehmet Hakan Atilla, a former deputy chief of state-run Halkbank jailed by a New York jury in January 2018 for his role in evading the U.S. sanctions, as head of the exchange.

Responding to Atilla’s appointment, the EBRD told the Turkish authorities that it would sell its shares in the bourse as soon as possible, Reuters reported two months ago, citing unidentified officials of the bank. The appointment of Atilla was the latest concern that the EBRD had over the running of the company, convincing it to sell its shares, Reuters said.

The purchase of the stake is aimed at helping Istanbul become a regional financial centre, the wealth fund said in a statement, thanking the EBRD for its previous involvement. The fund, which also owns companies including Halkbank, Ziraat Bank and Turkish Airlines, is chaired by President Recep Tayyip Erdoğan. Albayrak, Erdoğan’s son-in-law, is deputy chairman. It now owns 90.6 percent of the bourse. 

The EBRD bought the shares in the exchange in December 2015. Atilla was released from U.S. custody in July and arrived in Turkey to be met by Albayrak and a personal phone call from Erdoğan.

New York prosecutors have also charged Halkbank with taking part in the sanctions-busting scheme, which they say involved fictitious gold and food trades that helped Iran evade the sanctions. Erdoğan has said that the accusations against Atilla and Halkbank are fabrications aimed at damaging his government and the country.