Turkish Prime Minister Recep Erdogan has decided to take on the biggest family in the country in the form of Koc Holding. The markets don’t like it all, and the price of this political battle will be a major shock to investor confidence at a time when Turkey is about to realize its ambitions of becoming a major energy hub.
Koc Holding has a long political history of butting heads with the AKP and the Islamists in general.
The head of the Koc family, Mustafa Koc, has been critical of Erdogan in the media and during the Gezi Park protests this summer, the Koc family allowed protesters to seek shelter in one of its hotels in Istanbul. Erdogan is using this to make a case that Koc Holding has anti-government intentions. Erdogan’s response to this was to order a tax police raid on Koc’s refinery subsidiary, Tupras, and to cancel a €1.1 billion tender for Koc to build a warship, as well as threats to cancel another $5.7 billion Koc tender for the building of roads and bridges.
Two weeks ago, legal action was launched against the company, alleging that it orchestrated the February 1997 military coup. Erdogan is also including the media group that published Koc’s comments, owned by the Dogan Group, in the criminal charges.
At the same time, Koc Holding has been trying to get into the LNG segment, but Erdogan is holding it back. Koc’s Aygaz—the largest LPG distributor in Turkey—was one of the 13…