People stage a protest in front of a Bank Asya branch in downtown Ankara on February 4, 2015
Istanbul (AFP) - Turkey's opposition on Wednesday denounced as a scandal the seizure of an Islamic bank allied to US-based preacher Fethullah Gulen, the latest move in an intensifying crackdown against the interests of President Recep Tayyip Erdogan's arch foe.
Bank Asya has suffered major losses since last year after becoming embroiled in a bitter feud between Erdogan and his former ally Gulen, whom the president accuses of seeking to overthrow him.
The state-run Savings Deposit Insurance Fund (TMSF) seized 63 percent of Bank Asya shortly after the banking watchdog (BDDK) ruled in favour of its seizure and sacked the entire existing management team, citing a lack of transparency.
The BDDK said in a statement on its website late Tuesday that it seized the bank "because the institution has not presented a partnership structure that is transparent and open enough to allow for effective regulation."
The 63 percent stake had been owned by the bank's management.
Bank Asya's new management said on Wednesday that the move would not affect its operations.
Economy Minister Nihat Zeybekci defended the seizure, saying the takeover of the bank would end speculation and restore a safer environment.
"Whoever is concerned, what has to be done has been done," he told reporters in the capital Ankara.
- 'Undermines Turkey's reputation' -
The watchdog sacked the bank's executives based in Istanbul and appointed a new board of directors immediately after the seizure.
Selin Sayek Boke, deputy chairman of the main opposition Republican Peoples' Party (CHP), described the takeover of the bank as a "scandal" that would besmirch Turkey's international reputation.
"The destruction of hard-worn institutional credibility for political goals undermines the reputation, power and future of Turkey's economy," Boke said in a statement quoted by Turkish media.
A group of protesters gathered on Wednesday outside Bank Asya's headquarters in Umraniye on the Asian side of Istanbul, waving Turkish flags, reading the Koran and chanting slogans in support of the group under the watchful eye of the police.
Around 200 people gathered outside the bank's head offices in Ankara, carrying banners that read: "These people are here for you and ready to to sacrifice themselves for you."
- Sustained pressure on Gulen -
Bank Asya, founded by followers of Gulen in 1996, came under pressure from regulatory restrictions, withdrawals by government-run companies and attacks from pro-government newspapers.
The pressure on Bank Asya resulted in a crash in its share price and a massive downscaling of its operations.
The bank's shares have lost 70 percent of their value since December 17, 2013, when a high-level corruption probe emerged targeting key Erdogan allies -- blamed by the authorities on Gulen.
The bank said in November that it lost 301 million liras ($133 million) in the third quarter -- its first unprofitable quarter since going public in 2006.
According to data on Bloomberg, the bank had 12.6 billion liras ($5.2 billion) of loans and 9.8 billion liras of deposits at the end of September.
Deposits were almost twice that figure a year earlier, before the feud between Erdogan and Gulen prompted the withdrawals.
The seizure of the bank is the latest crackdown against Gulen's powerful movement known as "Hizmet", which brings together interests ranging from finance to schools to media.
Erdogan accuses Gulen and his followers of being behind the sweeping corruption probe that rocked his government while he was prime minister.
The president has vowed no mercy in the fight against Gulen, purging the police force and judiciary to rid them of pro-Gulenist elements.
State-run Anatolia news agency reported on Tuesday thatTurkeyhad cancelled Gulen's passport in a further escalation of Erdogan's campaign against the 73-year-old cleric, who has lived in the US state of Pennsylvania since 1999.
In a rare opinion piece published in the New York Times Tuesday, Gulen accused Turkey's leaders of "leading the country toward totalitarianism."
However Erdogan and Gulen were seen as close allies until recent years. Turkish media recalled that Gulen and Erdogan had both attended the launch of Bank Asya in October 1996, smiling broadly alongside then prime minister Tansu Ciller.