Turkey's Koc calls on Erdogan to address graft charges to lower tensions

ISTANBUL (Reuters) - Mustafa Koc, chairman of Turkey’s biggest company Koc Holding, on Sunday called on the government to calm financial markets worried about a corruption inquiry and denied he has sought to undermine Prime Minister Tayyip Erdogan.

Koc Holding Chairman Mustafa Koc makes a speech during the opening ceremony of the 12th Istanbul Biennial September 15, 2011. REUTERS/Murad Sezer

In a rare interview, Koc also told Hurriyet newspaper that in May 2013 he met with Fethullah Gulen, the U.S.-based Islamic cleric whom Erdogan has accused of orchestrating the corruption scandal, but that they did not discuss “political designs”.

Since a December 17 police operation, Erdogan has been battling a series of allegations that he and members of his family and senior government officials took bribes and engaged in other improprieties.

The popular leader, whose party has been elected three times since 2002, has accused Gulen’s followers of concocting the charges to sway voters ahead of local elections later this month.

“There is this perception out there and to act like there is nothing or to call all of it complete lies does not seem right to me,” Koc said. “Markets have been tense since December 17 (and) would immediately respond positively to a reduction in this tension. Trust needs to be rebuilt at once.”

The lira currency has lost almost 9 percent of its value against the dollar since December 17 amid concerns about political stability in the emerging market.

Koc Holding’s interests range from energy to automotive to consumer durables, and the conglomerate’s output accounts for almost 10 percent of the Turkish economy.

Erdogan has alluded to dissatisfaction with Koc Holding, especially last year during anti-government demonstrations in Istanbul, when protesters sought refuge from tear gas in a hotel owned by the Koc family.

Koc told Hurriyet the hotel’s operators were compelled to assist injured people on humanitarian grounds and that they had also helped exhausted police.

Conspiracy theories that Koc is collaborating with foreign forces to topple Erdogan are “products of the imagination. We have never been in a position to design politics. We have always been impartial,” said Koc, whose wealth is estimated at $1.2 billion by Forbes magazine.

The government launched a probe into the taxes of Koc Holding energy firms in July.

In January Tupras, the refiner controlled by Koc Holding, was fined 412 million lira ($187 million) by a regulator for violating competition rules, just days after recordings were leaked in which Gulen and his associates discussed backing Tupras for overseas contracts.

Koc said he has not spoken with Erdogan in a year. “There is serious disinformation between us and Ankara,” he said.

He praised the reforms of the ruling AK Party for expanding the Turkish economy, especially for the nearly $50 billion in privatizations it has overseen.

($1 = 2.21 lira)

Reporting by Ayla Jean Yackley; Editing by Rosalind Russell