Uzan case: end of a legend with a silent escape

In addition to being a member of the Uzan family, which has been active in Turkish business since the 1950s, Cem Uzan's name started to be frequently heard in the '90s, when his Magic Box Company founded Turkey's first private TV channel “Magic Box TV,” which was later renamed “Star 1,” in March 1990. It turned into a huge media group over time. The 1990s were the golden age of the Uzan family, which made investments across Turkey in various sectors such as banking, energy, communication and construction. It was 1994 when the Uzans took the stage with the Telsim GSM company, which became the second-largest GSM operator in the country. “During the accelerated privatizations of the 1990s, the Uzans purchased eight big companies within five months from the state. You cannot see another example of purchasing so many companies within such a short period of time,” says Memduh Taşlıcalı, the author of a book on Uzan titled “White Collar: The Phenomenon of Cem Uzan,” while explaining what he calls “the Uzan empire” of the '90s. Taşlıcalı says Cem Uzan's way of doing business has never complied with standards. “He was getting higher by constantly clashing with his rivals and the state. He kicked up a row whenever he started a new business. His principle was ‘I do not obey the rules, I set the rules.' He and his family have always been at odds with the state,” he says. In fact, the Uzan empire was estimated to be worth $1.6 billion by 2001. Uzan was dominating the agenda, with his deep interest in expensive wines, his yachts, villas and his personal helicopter.

Things take a turn for the worse

Yet things took a turn for the worse. A Savings Deposit Insurance Fund (TMSF) investigation into the Uzan-run İmar Bank, whose ads offering high interest rates for dollar investments are still fresh in the minds of many, in 2003 revealed a huge deficit and established that the company hid the real number of its clients and sold nonexistent Treasury bonds. The TMSF, which compensated Uzan's clients and account holders for the money they lost in the bank, said Uzan's debts in regards to the two banks topped TL 3 billion. In order to recoup the money, the TMSF took over 200 companies of the Uzan family group, including Star Media, two cement companies and the Telsim GSM company. In addition to all this, in 2004 a US judge ruled that five members of the Uzan family, including Cem Uzan, "perpetrated a huge fraud" upon Motorola, Inc.'s financing affiliate and ordered them to pay more than $4 billion in damages. The US court said the Uzans siphoned more than a billion dollars of Motorola's money "into their own pockets and into the coffers of other entities they control."

Arrest warrants were issued for Kemal Uzan (Cem's father), his brother Yavuz and Kemal's younger son Hakan, on charges of embezzlement, fraud and irregular offshore transactions.

Cem Uzan was sentenced to three years, six months in jail in a case filed against him by the Küçükçekmece Prosecutor's Office on Jan. 10, 2005, after a four-and-a-half-year trial. The sentence was appealed, and the case is currently awaiting review by the Supreme Court of Appeals. If the high court upholds the sentence, Uzan will go to jail. Uzan has been barred from international travel, as he is now also a suspect along with 33 others in a case being heard by the İstanbul 8th High Criminal Court, facing charges of “establishing an organization and being a member of it with the intent to commit a crime,” “embezzlement,” “fraud” and “fraud against the state.” The other suspects include his father, Kemal Uzan, siblings Murat Hakan Uzan and Ayşegül Uzan Akay and uncles Yavuz and Bahattin Uzan.

Politics, but why?

Before the TMSF crackdown on his businesses' wrongdoings, foreseeing the approaching storm, Uzan entered a completely different field: politics. “When Cem Uzan announced that he would run in the general elections of 2002 just a few months before the elections, many thought he was joking. But later it appeared that he was not. What was behind the political excitement of a man who is both wealthy enough to be among the world's top billionaires and ‘aristocrat' enough to host princes and kings?” asks Taşlıcalı in his book. Defining the atmosphere of the time, Taşlıcalı says Uzan's companies were implicated in several ongoing cases and he saw politics as a “safe haven.” His right-wing Young Party (GP) was the party with the most aggressive and consistent election campaign, with ads that were basically pledges beyond the imagination of any shrewd, populist politician from any part of the world -- such as “We shall lower the price of diesel to YTL 1.” In the end, the GP received 7.5 percent of the vote in the 2002 elections, which also marked the start of Justice and Development Party (AK Party) era in Turkey as it came to power with 34 percent. “Turkey would be totally different if the GP had passed the 10 percent election threshold,” Taşlıcalı says. But Uzan could not, and missed the political immunity he was seeking. After all this, Uzan left Turkey in early October, fearing jail time over a possible fraud conviction. “Uzan's flight did not surprise me, because it was surprising for me that he stayed in the country until now. Maybe he was not expecting the AK Party to rule the country for such a long time and he was expecting conditions would change. Having understood that this will not happen any time soon, he fled the country,” Taşlıcalı says. Now, after once storming the country in almost every field, Uzan is a suspect at large with an İstanbul court-issued arrest warrant, ending an empire of power and money.