President Recep Tayyip Erdogan appointed himself chairman of Turkey’s sovereign wealth fund and got rid of the entire management staff that had presided over two years of inaction.
Zafer Sonmez, head of Turkey and Africa for Malaysia’s government investment vehicle Khazanah Nasional Bhd, was named general manager. Treasury and Finance Minister Berat Albayrak,Mr Erdogan’s son-in-law, will also sit on the board, according to a decree published in the Official Gazette.
The overhaul comes two years after the government formed the fund to capitalise on $200 billion of state assets and put a lid on market turmoil in the wake of a failed coup attempt. But the organisation’s goals and strategy were never clearly defined and internal strife led to the firing of its first chief executive officer after Mr Erdogan publicly expressed his disappointment.
The shake-up consolidates the president’s influence over another key financial institution in Turkey. Mr Erdogan had promised in May to exert greater influence on economic policy after he was given expanded executive powers following an election in June.
He’s delivered on that pledge, ousting the old guard of policymakers who’d guided the economy since 2002 and giving himself the sole authority to make appointments at the central bank and other state organisations.
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The wealth fund has stakes in assets including Turkish Airlines, Turk Telekom, state lenders TC Ziraat Bankasi and Turkiye Halk Bankasi, state oil and pipeline companies, the national postal service, the stock exchange, the national lottery and national railway.
Since its formation, officials have debated the purpose of the fund, with some saying the companies should be managed to add value in line with a traditional sovereign vehicle, while others argued that its assets could be deployed to subdue market turmoil. Others pushed for the assets to be securitised and for the state to borrow against them.
In the shake-up, Mr Erdogan ousted one of his own advisers from the board, Yigit Bulut. The new board members include Rifat Hisarciklioglu, head of the Turkish chambers of commerce; Huseyin Aydin, head of the banking association and Ziraat CEO; Arda Ermut, the head of Turkey’s investment support and promotion agency; Erisah Arican, a professor and member of the Borsa Istanbul board; and businessman Fuat Tosyali.
