(Bloomberg) — Turkey’s banking regulator has drawn up a plan to restrict the tenures of banking executives, a proposal that comes after high-profile accusations of a ponzi scheme at a bank with one of the nation’s longest-serving chief executive officers.
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According to the proposal, CEOs would be permitted to serve in that position at the same bank for at most 10 years, according to a draft of the regulation seen by Bloomberg. Deputy general managers would also be allowed up to 10 years, but that could be extended for as much as 5 years with approval from regulators. The number of deputy general managers won’t exceed 15 per lender, according to the draft.
The banking regulator, or BDDK, declined to comment on the proposal.
The move was triggered by an alleged fraud targeting famous footballers including former players for FC Barcelona and Inter Milan. Last year, Secil Erzan, a bank manager at Emirates NBD PJSC’s Turkish unit Denizbank AS, was accused of orchestrating the $44 million ponzi scheme. Lured by the promise of a 250% return on their dollar investments, dozens of investors including the former athletes delivered piles of cash to Erzan.
In November, prosecutors also indicted Denizbank CEO Hakan Ates for his alleged role in the scheme. However, the court returned the indictment to prosecutors, citing lack of information including the victims of the alleged fraud and how much the suspects profited. Ates, 65, resigned from his post in December.
Ates had been at the helm of the bank since 1997, and steered Denizbank through significant expansions and its 2019 acquisition by Emirates NBD.
The new regulation also aims to limit branch managers’ tenures to 4 years at the same bank. If passed, institutions would have to comply with the regulations by June 30, 2025, according the draft.
(Updates with limit on number of deputy GMs in second paragraph.)
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