Confrontation between the Uzan family and the Capital Markets Board (SPK) came to a head on 3 November when the Energy Ministry took control of Cukurova Elektrik (CEAS), a subsidiary of the Uzan-owned Rumeli group of companies. The Uzan family gained control of CEAS in 1993 as part of its privatisation. CEAS produces and distributes hydroelectric power in central Turkey.
The SPK has long alleged irregular activities by CEAS management and complained that their current structure of equity participation breached its concession, but both civil and criminal actions against the group had failed. When CEAS failed to meet obligations in its concession to produce and distribute electricity in the Adana area, despite repeated warnings, the ministry acted.
According to the SPK and the ministry, CEAS improperly transferred funds totalling TL 7.6 million million ($152 million) to acquire shares in five cement factories and a telecommunications company, all owned by the Uzans. CEAS’ concession stipulates that it should exclusively
engage in electricity generation and distribution.
Allegations that the action stemmed from a political feud between Prime Minister Tansu Ciller and the Uzans have been flatly denied by Energy Minister Sinasi Altiner.
SPK appointees will take the place of the present executive and supervisory board members under the terms of the Capital Markets Law.