TURKEY: Privatisation chief change excites controversy

09 August 1996

Controversy has surrounded the replacement by the new Islamist-led coalition government of Privatisation Administration (OIB) chief Ugur Bayar with a public-sector banker, Ismail Karakaya, on 29 July.

Turkish press reports say Bayar was sacked in revenge for allegedly leaking documents about bids for the privatisation of the state's minority stake in car-maker Tofas in August 1993. A parliamentary commission is investigating the then premier and now Foreign and Deputy Prime Minister Tansu Ciller's involvement in the bid process in a case won by the Islamist Welfare Party (Refah) when still in opposition in the spring.

'There was nothing to be leaked, it was a public document,' Bayar said in a 31 July interview. Then deputy-chairman of the OIB's predecessor Public Participation Administration, Bayar said he correctly documented a request by Ciller that the Tofas bids be sent to her residence. 'If the premier asks for bid envelopes to be sent to her residence, one way or another that is going to be aired,' Bayar added.

Bayar subsequently resigned in December 1994, but was re-appointed as OIB chairman on 8 April by a short-lived, minority coalition.

He also defended a controversial decision he took independently soon afterwards to cancel bids for a block sale of shares in the government's 51.66 per cent stake in the Black Sea Iron & Steelworks.

Bayar said criticism by the Privatisation Minister, Ufuk Soylemez, of the Erdemir cancellation under the previous coalition was unfounded.

'He needs a scapegoat,' Bayar said, pointing out that nothing was done about the Erdemir bids from their return in February 1995 to the May cancellation, at a time when Soylemez himself headed the OIB until resigning in late November to contest endDecember general elections.

Bayar pointed out the bids had expired and Erdemir's whole balance sheet had changed.

'It had to be cancelled,' he said. 'I just legalised a de facto situation.'

After being replaced by Karakaya, Bayar also resigned from his subsequent appointment as an adviser to the new chief, and on 31 July from his board chairmanship of Erdemir.

The new coalition government has pledged to accelerate privatisation. However, industry sources say frequent changes of privatisation chiefs impede continuity at the OIB, and hamper its operations.

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