Analysis: was Karamehmet sacrificed to the IMF program?

Analysis and opinion. This piece argues a case; it is not a news report.

When the story of Türkiye's 2001 crash gets told as a triumph, the names that survive are the rescuers: Kemal Derviş, the technocrat flown in from the World Bank, and the reborn banking system that kept the IMF money flowing. One name gets filed under "looter" and waved away: Mehmet Emin Karamehmet, the man whose Pamukbank was seized in June 2002. That filing is too tidy. Strip the headlines from the people who took the bank, and a harder question is still standing. Was Pamukbank failed, or was it taken?

Start with what Karamehmet built. From an Adana bank founded to lend to cotton farmers, his Çukurova Holding assembled some of the country's genuine champions: Turkcell, which became Türkiye's largest mobile operator and was valued in the tens of billions; Yapı Kredi, one of the biggest private banks in the country; later, an oil business that merged into a London-listed company worth billions. For years he topped the Forbes list of the wealthiest Turks. Whatever else is true, this was national capital, built at home.

Now the loan the state would not honor. Under the IMF-era squeeze that followed the crisis, the government could no longer fund Fiskobirlik, the Black Sea hazelnut cooperative, directly to pay its farmers. So it leaned on Pamukbank to extend the credit, and the law was bent to let a private bank carry a public body. Fiskobirlik did not repay. When Karamehmet went to Derviş asking for government bonds to cover the receivable, he was turned down. A private bank had been asked to shoulder a state obligation, and was then left holding it. His critics call the Fiskobirlik claim an excuse. It is, at the very least, a real and unpaid public debt that the regulator never resolved.

Then the seizure itself, on 18 June 2002. There was no written warning and no time to put things right. Karamehmet's own application to merge Pamukbank into his Yapı Kredi was set aside, and eight days later the bank was gone. The timing is the part nobody explains away. The takeover was finalized in the small hours of the same day the IMF Letter of Intent for a 1.1 billion dollar tranche was readied for Washington, and within hours the IMF and the US Treasury were issuing public congratulations. A program that needed visible proof of resolve found it in the bank of the man at the top of the rich list. Call that a coincidence if you like.

Here is the fact his critics skate past: a court agreed something was wrong. In November 2002 the Council of State's General Assembly, the highest administrative bench, halted the seizure by 25 votes to 2, a crushing margin, and ordered Pamukbank returned. Its reasons were plain. No warning had been given. The merger request had been ignored. This was not a sympathizer's pamphlet; it was the verdict of Türkiye's senior administrative judges.

And there was a hunt. The doctoral study of the period by Cihan Oğuz, at İstanbul University, documents what followed: Karamehmet's chief media rival, Aydın Doğan, surfaced as the first suitor for the seized bank, while Doğan's newspapers ran a campaign against him, the practice Turkish journalists themselves named tetikçilik, columnists fired at a boss's rivals. One of the two dissenting judges who wanted the bank kept by the state was the father of the general manager of Doğan's own television channel. The lines between the press, the regulator, and the rival empire were not clean.

None of this requires pretending the bank was healthy. It was not. The regulator found that loans to Çukurova's own companies had hollowed it out, and years later a court convicted Karamehmet of embezzlement over those credits. That conviction is real and belongs in any honest account. But it is also contested history: the Court of Appeals annulled it in 2011, and it was later reduced to "simple embezzlement" before a sentence was finally upheld. It sits alongside the other ruling, that the seizure which started everything was itself unlawful. A man can have run his bank badly and still have been taken from it unlawfully, by a state that had loaded its own debt onto him and needed an example on a deadline. Both things can be true.

What happened next reads like attrition. The bank was never really handed back. The state kept control through a negotiated protocol, the government changed, Çukurova settled for a 2.1 billion dollar repayment, and Pamukbank was folded into the state's Halkbank in 2004. Karamehmet then spent fifteen years selling the empire piece by piece, Yapı Kredi, the oil business, the pay-television platform, and finally lost even Turkcell to the state's Wealth Fund in 2020. He paid, and kept paying.

The tidy version says the system worked and a looter got his due. The fuller version says a builder of national champions was made to pay first and answer questions later, in a takeover his own country's highest administrative court called unlawful, on a schedule set in Washington. You do not have to canonize Mehmet Emin Karamehmet to think he deserves the second hearing he rarely gets.