Chief executive of Istanbul exchange takes leave ahead of AGM

Hakan Atilla, a former Turkish banker jailed in the US for helping Iran evade sanctions, has taken leave as head of Istanbul’s exchange operator until shareholders meet later this month, fuelling speculation he may be replaced.

“He has gone on leave at his own request, and we expect that he will remain on leave until the general assembly,” a spokesman for Borsa Istanbul said. Atilla has not resigned, and a decision about his future at the bourse may come at the annual meeting on March 26, he said.

Bloomberg reported that Atilla will step down at the shareholders’ meeting, citing unnamed sources.

Atilla was named chief executive of Borsa Istanbul, owned by the Turkish Wealth Fund, in October 2019 after the US deported him following a 28-month prison sentence.

Atilla was convicted of bank fraud and conspiracy for helping Iran conduct an illicit oil trade through transactions at Turkish state lender Halkbank, where he served as deputy CEO until his arrest in 2017 during a visit to New York.

Turkey is bracing for another trial, expected to begin in May, in New York against Halkbank on charges of fraud, money laundering and sanctions offences. US prosecutors allege Iran funnelled some $20bn in oil revenue through Halkbank to sidestep sanctions for its nuclear programme in 2012 and 2013.

A large fine and other punitive actions against Halkbank could rock Turkey’s banking system. President Recep Tayyip Erdogan has lobbied the US government to dismiss the case. Donald Trump, the former president, told Erdogan he would try to resolve the case in Turkey’s favour, according to former national security adviser John Bolton.

Replacing Atilla could be a symbolic gesture aimed at healing the rift between Turkey and the US as Erdogan pledges to improve relations with the new administration of Joe Biden.

Atilla received a hero’s welcome when he returned to Turkey. Erdogan’s son-in-law, former finance minister Berat Albayrak, called the verdict against Atilla an “unjust conviction” when he named him head of Borsa Istanbul.

Albayrak quit his post in November, part of a shake-up of Turkey’s economy management after the lira sunk to record lows and the central bank depleted its hard currency reserves trying to defend it. The scheme was an effort to comply with Erdogan’s demand that interest rates stay low despite soaring inflation.

Turkey’s current economy team, including a new central bank governor, has promised a return to orthodox policy, and interest rate hikes have helped the lira recover some of its losses.

Borsa Istanbul plans an initial public offering next year. The government controls 90 per cent. The European Bank for Reconstruction and Development sold its 10 per cent stake to the Turkish Wealth Fund after opposing Atilla’s appointment, and the Qatar Investment Authority last year purchased a 10 per cent stake for $200m.