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A helping hand in Romania

Turkish inspectors have discovered that the governmental abuse of the state banks continues and has remained unpunished.

Professor Vural Akisik's job of preparing Turkey's state banks for privatization will be all the harder because the government seems unwilling to abandon its old habits of meddling in the lending decisions of the state banks. Inspectors appointed by Turkish president Ahmet Necdet Sezer recently discovered that the abuse of state banks continues - and goes unpunished.

A senior government source told Euromoney that in June this year the president had sent a file to prime minister Bulent Ecevit concerning an alleged misuse of funds to the tune of $118 million involving Vakifbank. The government had ordered Vakifbank to help out the Bayindir Group, whose Romanian affiliate, Banca Turco Romana, was experiencing liquidity problems. The bank duly struck off Bayindir debts totalling $93 million and sent $25 million to the troubled bank. In exchange, Vakifbank obtained minority shares held by Bayindir in two companies. But finance ministry inspectors discovered that these shares were worth no more than $38 million. Last year Banca Turco Romana, which had self-declared assets of $300 million, became insolvent.

The president asked Ecevit to prosecute the managers of the bank. Ecevit was livid because had supported the Bayindir loan.

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