Bottom Line: Embattled Turkish Prime Minister Recep Tayyip Erdogan is taking on the country’s biggest company, Koc Holding, with criminal legal action that might end up being Erdogan’s final undoing.
Analysis: Last week, the founder of Koc Holding—and the patriarch of this wealthiest family in Turkey, used the media to criticize Erdogan. Erdogan’s response was to launch legal action against Koc Holding, filing a criminal complaint alleging that the company was responsible for organizing the coup of 28 February 1997. Erdogan is also including the media group that published Koc’s comments in the criminal charges. Koc Holding’s relations with Erdogan took a turn for the worse this summer when the company’s Divan Hotel in Istanbul was caught sheltering demonstrators during mass protests that broke out over plans to raise Gezi Park. This then resulted in Erdogan ordering a tax police raid on Koc’s refinery subsidiary, Tupras and the cancellation of a €1.1 billion tender for Koc to build a warship and threats to cancel another $5.7 billion Koc tender for the building of roads and bridges.
Recommendation: Erdogan is taking on more than he can chew. Koc Holding owns the country’s only refinery, along with JVs with Ford and Fiat and a number of other manufacturing powerhouses. Erdogan is attacking a family that provides 9% of the country’s GDP, 10% of its exports and 9% of its tax revenues. More than anything, this shows Erdogan’s panic. It was, after all, this very situation that led to the 1997 coup and it all went down via the media.