Turkey’s president has said legislation will be introduced to seize the main opposition party’s stake in the country’s largest listed lender and transfer it to the Treasury.

Recep Tayyip Erdogan, who exerts unprecedented control of over Turkey’s $800bn economy, has repeatedly criticised the Republican People’s party (CHP) for holding a 28 per cent stake in Isbank that was granted by the modern republic’s founder, Mustafa Kemal Ataturk, upon his death in 1938.

“Ataturk did not do this so the CHP could take it and use it. He did it so it would go to the Treasury. We are now bringing this matter to parliament . . . and we will transfer the stake to the Treasury,” Mr Erdogan on Saturday told a crowd in the city of Kayseri.

The CHP has four seats on Isbank’s board and donates its dividends to cultural associations. The lender’s ties with the CHP are seen as a shield against Mr Erdogan’s meddling in the banking sector.

In September, Mr Erdogan demanded an investigation into the CHP’s stake, sending Isbank’s shares and the lira tumbling. At the time, the lender, which has assets of about $68bn, said it was too important to the economy to be dragged into a political debate.

No one was available from the party on Saturday to comment on Mr Erdogan’s remarks. Kemal Kilicdaroglu, the CHP’s chairman, urged respect for Ataturk’s legacy last month when Mr Erdogan threatened to investigate.

The Nationalist Movement party, which acts as junior partner to Mr Erdogan’s Justice and Development party (AKP), has said it would support legislation to seize the CHP’s stake, which would secure the draft bill enough votes to pass parliament. The pro-government Sabah newspaper said on Saturday the AKP was already drafting the bill.

Investors are unnerved by the extent of Mr Erdogan’s control over the economy since he won a June election to a new executive presidency that vastly expanded his powers.

The central bank’s independence has been eroded amid his repeated call for lower interest rates, arguing the unconventional view that higher interest drives inflation.

He has appointed himself chairman to the country’s sovereign wealth fund and named his son-in-law, Berat Albayrak, as economy tsar.

Concerns about Mr Erdogan’s power grab contributed to a currency crisis that erupted in late July, driving the lira to record lows. It has lost more than a third of its value this year.



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