Turkish defence conglomerate could become casualty of unrest

Erdogan with Koc holding chairman
Erdogan with Koc holding chairman

The defense business of Turkey’s largest conglomerate could be a casualty of a row between the prime minister and one of its top executives over monthlong civil unrest that has battered the Turkish government, according to analysts and industry sources.

The prime minister has accused the Koc conglomerate of helping protesters, whom he referred to as “terrorists.” At stake, observers said, could be billions of dollars worth of government contracts in the portfolio of Koc’s two large defense companies — shipyard RMK Marine and armored vehicle manufacturer Otokar.

“It should come as no surprise if the government decided to thoroughly scrutinize all Koc-related contracts, including defense deals,” an analyst based here said.

An industry source said that some of the RMK and Otokar contracts may face revisions and some future deals may change course.

“It won’t be the first time a company becomes the victim of a political feud with the prime minister,” he said.

In 2009, Turkish tax authorities fined the country’s largest publishing group, Dogan Medya, US $3.2 billion over accounting irregularities, a fine that was larger than the company’s market value. The government denied any links between politics and the fine, although Prime Minister Recep Tayyip Erdogan had publicly called for a boycott of Dogan outlets and accused them of being politically hostile to his government.

What started May 31 as a demonstration by environmental activists in Istanbul has mushroomed into nationwide protests against Erdogan’s government in 80 cities. More than 2.5 million Turks have since protested Erdogan’s growing authoritarianism and Islamist governance. Four people have been killed in the demonstrations and more than 8,000 have been injured.

In one incident, protesters tried to escape police tear gas and pepper spray and took refuge in a posh Istanbul hotel, Divan, owned by Koc. Hotel management admitted the protesters to its lobby, which quickly turned into a makeshift first aid room.

The police fired more tear gas and pepper spray into the hotel lobby, although it is illegal to fire these chemicals into indoor spaces. It was reported that Ali Koc, a board member and third-generation family member, had ordered the hotel to help the protesters.

On June 16, an angry Erdogan said in a public rally: “We know which hotel owners helped terrorists [protesters]. It is a crime to abet terrorists. And those crimes will not remain unpunished.”

A senior government official close to Erdogan’s office said: “It is true that Erdogan got very upset by Koc’s open support for the protests. But I cannot tell how his anger would surface in this case.”

A procurement official familiar with Koc companies’ contracts denied any government intervention. “These are highly credible companies involved in most strategic programs. We have not yet received any political opinion regarding Koc-related contracts. And I cannot comment on how the prime minister will choose to behave in this matter.”

Erdogan chairs the Defense Industry Executive Committee (SSIK), the ultimate decision-maker on procurement. The procurement official admitted that Erdogan has a “powerful personal touch” when it comes to final decision-making at that panel.

Koc’s RMK Marine, based in Istanbul, is one of Turkey’s largest private shipyards. In January, the SSIK opened contract negotiations with RMK Marine to produce six corvettes under Turkey’s first national warship program, Milgem. The contract is worth $2.5 billion.

The corvettes are the smallest warships in the Turkish Navy. The largest ship is a frigate, and Turkey plans to use the experience gained in the Milgem project to design, develop and construct its first national frigate, the TF-2000, in the 2020s. Earlier, RMK Marine won a contract to build four search-and-rescue ships for the Coast Guard.

Otokar is the top supplier of armored vehicles to the Turkish Army. In 2008, Otokar signed a $500 million contract for Turkey’s first indigenous tank, the Altay. Under the deal, Otokar will build four prototypes that will undergo performance tests this year. The deal is for the prototypes only, and Otokar hopes to win the main production contract after performance tests.

Ironically, only 20 days before the unrest broke out, Koc announced that defense would be the fifth priority sector in the group’s strategic business planning, in addition to energy, finance, durable consumer goods and automotive production. – Defence News

Turkey unrest simmering

Ready for another round...
Ready for another round…

Turkish riot police have fired rubber bullets to block demonstrators from entering an Istanbul park, the birthplace of deadly unrest in June.

Riot police on Monday fired rubber bullets, tear gas and water cannons to block demonstrators from entering the small Istanbul park.

Police moved after Turkish authorities reopened Gezi Park to public use earlier in the day.

“Four people died for this park. This park will reopen!” a young demonstrator shouted, while others were trying to convince the police that their action was unfair and they should stop emptying the park.

But later in the day after police sealed off access to the central Taksim Square and the adjacent park, the cat-and-mouse game with protesters ensued in the nearby thoroughfares.

At least one demonstrator was seriously wounded, with his left eye abundantly bleeding, an Agence France-Presse journalist reported.

“You should be ashamed of yourself. Go on, shoot me too!” one of the protesters yelled at a police officer on top of an armoured vehicle.

Some angry shopkeepers at a fish market close to Taksim square lashed out at police and anti-government demonstrators, accusing them of ruining their business.

Earlier on Monday when Turkish authorities reopened the park they warned that no further protests would be tolerated.

‘Occupation zone’
“Gezi Park has been reopened to public but there are many calls for unauthorised protests aimed at turning the park into an occupation zone,” Istanbul Governor Huseyin Avni Mutlu wrote on Twitter.

A brutal police crackdown on May 31 against a peaceful sit-in to prevent 600 trees from being cut down in a park redevelopment scheme sparked June’s nationwide protests against Turkish Prime Minister Recep Tayyip Erdoğan and his Islamic-rooted government.

Protesters occupied the small park and put up tents to remain around the clock before being evicted by police on June 15. Erdogan has become unpopular as a result of his backing for Islamic Syrian rebels

Since then, the park has been closed. But in the face of public anger, authorities planted additional trees and a Turkish court annulled a government decision to redevelop the park, saying locals had not been sufficiently consulted about the project.

Residents feared the redevelopment plan would turn the area into a shopping district, while urban planners and ecologists said the proposals did not respect the environment.

Nearly three weeks of protests in Turkey have left four people dead and some 8 000 injured. – AFP

Turkish Autumn: ‘The exact opposite of Arab Spring’

Growing Islamism in the region is a driving force in the lifeblood of the Turkish protests, and even has the sympathy of the police, but the Turkish military is waiting in the wings, political expert Avigdor Eskin told RT.

RT: Erdogan vowed to resolve the crisis when he returns to the country. How do you think he’s going to do that?

Avigdor Eskin: Good evening, blessings from the holy city of Jerusalem. I happened to be a witness to the unrest in Turkey. I spent Sunday and Monday with the demonstrators in Istanbul this week and I can tell you if we were talking two years ago about the Arab Spring then now we are facing the Turkish Autumn. This is exactly the opposite process of what we were facing in Egypt and the region. We
see that this wave of Islamism is becoming a really heavy burden to the people and they don’t want to continue with that. This is what the Turkish people were saying.

RT: You say you were there amongst those people in the demonstration. What sort of people are they?

AE: I was not participating in any riots or demonstrations I was just an observer there to tell the truth and the truth is that the unrest was absolutely spontaneous. People even did not carry any slogans in English, people were not prepared, they just came spontaneously from all parts of Istanbul. It was not only Taksim Square, it was everywhere in the city. You could even see demonstrators on the way to the airport just marching in a very restrained and peaceful way, I must say. Now, unlike the unrest in Romania in 1989 which resulted in the revolution against Ceausescu and I remember Moscow in 1991 and 1993, the amount of people participating and the real determination to reach the goal in Turkey is much stronger than in any other place I saw in the world.

The events there are really very serious and Turkey is not going to be the same tomorrow as it was yesterday. It’s a different country already. Even if we are talking about certain parallels with Paris in 1968, the cultural atmosphere is very different because we are talking about people who are students, intellectuals, professionals, they are all there. There was no sign in any part of Istanbul that there was any even small gathering of the government or rolling Islamist Party supporters. It was just amazing that the street was covered by the protesters and the police were sympathetic to them, I saw it.

RT: Where is the military? We haven’t seen them at all.

AE: The military is waiting. As you know, many generals and former chiefs of staff of Turkey are in prison now. This is a very special situation where they are waiting for the developments because the Army will take control only if there are more serious disturbances. They are waiting, maybe, the prime minister and the president will start negotiating with the demonstrators. Maybe there will be some appeasing process, they are still waiting for something good to happen. But if instead of negotiating with his own people the prime minister keeps conveying his tough message or even stirring them up more, then you will see next week or in the week after something from the Army. Turkey, as you know, has a culture of a kind of military regime, democracy, military regime, these things happened to them in the past and nobody will be surprised when it happens again now. – RT