Investors flee firms on İMKB alleged to be targeted in 1997 coup probe wave

During Thursday's late afternoon session, Doğan Holding shares traded on İMKB nosedived with a loss of 15 percent over the previous day's closing session. Doğan Yayın Holding shares lost 12 percent in value while Hürriyet Gazetesi shares were down 10.8 percent in the same period. Doğan Burda shares also lost 2.39 percent. Koç Holding shares fluctuated throughout the day; but were headed southwards in late afternoon session.

Turkish police raided dozens of premises in three provinces as part of an investigation into the 1997 coup, searching for 31 retired military officers for whom detention warrants were issued. The latest wave is part of a long civilian-led campaign Turkey has seen over the past few years to confront its coup-filled past. Earlier investigations have found it was not only the armed forces that were involved in Feb. 28: various media outlets and business circles also played a role in provoking the military to stage the coup. Deputies from the government toppled during the coup did not hesitate to openly accuse Doğan Media Group owner Aydın Doğan, former Sabah Editor-in-Chief Zafer Mutlu and then-Sabah Media Group owner Dinç Bilgin of having the biggest responsibility in making the Feb. 28 intervention happen. It is also now known that some newspapers, particularly Aydın Doğan’s Hürriyet, ran stories that were manufactured by the military, under orders from generals.  Doğan Holding released a written statement on Thursday, denying reports that the latest coup investigation could include the group. “There has been no extraordinary development regarding our shares traded on the İMKB that we didn’t share with the public,” the statement read. The officers that were sought on Thursday, including retired Gen. Çevik Bir, are some of the military figures who played a major role in the postmodern coup. Observers argued this latest probe could expand into new arenas, covering the media and businesses. Bülent Orakoğlu, chief of the National Police Department’s intelligence department during the coup, told Today’s Zaman on Thursday that supporters of the 1997 coup from Turkey’s media, business and even judiciary circles should be investigated by prosecutors. “It will be for the benefit of the Turkish public if these shadowy relations are brought to light. …We have faith this will happen,” he explained. Discussing Thursday’s downturn in Doğan shares in a phone interview with Today’s Zaman, Selim Işıklar acknowledged the reason for the drops was that investors did not want to risk losing their money in case of an investigation into the group. “We are expecting the decline in Doğan shares to continue in the following days. The course of the probe will define the exact investor reaction in these shares,” he explained. However, Işıklar said, there may be some investors who will flock to take advantage of the dip in Doğan shares to buy some shares on İMKB.

The 1997 coup dealt a heavy blow to the Turkish economy – as in all military tutelages -- during the years that followed it. The post-Feb. 28 period saw the collapse of several banks and the funneling of billions from Turkish banks to unidentified individuals. An already struggling Turkish economy culminated in an economic crisis in 2001, resulting in the loss of a substantial amount of assets. Turkey saw its gross national product (GNP) drop $50 billion due to the 2001 domestic economic turbulence triggered by the 1997 coup. The country’s growth rate smashed to the lowest level in 55 years on the fourth anniversary of Feb. 28 coup. Unemployment was 6 percent in 1996 and it hit 9 percent in 2000. In the same time period, Turkey’s foreign debts skyrocketed to $115 billion from $80 billion and income per capita fell to $2,000 from $3,000.