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, 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 fund was formed to try and capitalize on state assets and put a lid on market turmoil in the wake of a failed coup attempt. But the fund’s goals and strategy were never clearly defined and internal strife led to the firing of its first chief executive officer after Erdogan publicly expressed his disappointment.
The shakeup consolidates the president’s influence over another key financial institution in Turkey. Erdogan had promised in an interview with Bloomberg 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 policy makers who’d guided the economy since 2002 and giving himself the sole authority to make appointments at the central bank and other state organizations.
The wealth fund has stakes in assets including Turkish Airlines, Turk Telekom, state lenders TC Ziraat Bankasi AS and Turkiye Halk Bankasi AS, 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 securitized and for the state to borrow against them.
In the shakeup, 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.