Tags: gold | smuggling | Iran | sanctions

Halkbank Says Role in Iran Gold Trade Legal After CEO Arrested

Monday, 23 Dec 2013 06:16 AM

Turkiye Halk Bankasi AS, the lender whose shares have slumped 17 percent since a corruption probe started, said it hasn’t broken domestic or international laws after its chief executive officer was arrested over the weekend.

Payments made by the bank on behalf of Turkish companies to Iran were transparent and trackable, the lender said today in a filing to the Istanbul bourse. Halkbank also said there were no rules against precious metal trading with Iran until July 1 and that it ceased to take part in transactions with the country on June 10 after it became public the U.S. planned new sanctions.

A wide-ranging corruption probe became public on Dec. 17. Police have said the inquiry targets organized graft, money laundering and gold smuggling. At least 60 police chiefs have been purged in the past week, sparking concerns of an escalating confrontation between prime minister Recep Tayyip Erdogan and his former political ally, U.S.-based Islamic cleric Fethullah Gulen, who has a wide following in the police and judiciary.

Suleyman Aslan, Halkbank’s CEO, was formally arrested over the weekend after being detained last week. Authorities found $4.5 million inside shoe-boxes in his house on Dec. 17, Hurriyet newspaper reported Dec. 21, citing Aslan’s testimony. The money was intended for charitable educational establishments in Turkey and Macedonia, the newspaper cited his lawyer as saying.

Halkbank fell 0.4 percent to 13.10 liras as of 10:56 a.m. in Istanbul.

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