Cem Uzan continues quest for $38.5 billion in compensation

According to information obtained by Today's Zaman, the Ministry of Energy and Natural Resources faces $16.5 billion in compensation claims from firms with direct ties to Cem Uzan, who has filed for political asylum in France.

Many of the firms hail from the European energy sector and have initiated arbitration proceedings against the ministry for the usurpation of assets in Turkey which they had claims to.

The Energy Ministry’s biggest worry out of the $39.5 billion in compensation claims is a $10.1 billion claim by Cem Uzan’s partners in Libananco Holdings Co., which holds 66 percent of shares in the Çukurova Electricity Corporation (ÇEAŞ) and the Kepez Electricity Corporation, both of which Uzan is also a major shareholder in. The ministry won two of the three cases initiated by this company, but the large $10.1 billion case is still underway.

Of the two cases won by the ministry, the Polish Cementownia Nowa Huta, in which Çukurova Electricity and Kepez Electricity hold 12.24 percent and 10.73 percent of shares, respectively, filed an arbitration case against the ministry in the International Centre for Settlement of Investment Disputes (ICSID) for $4.648 billion in claims. The case was decided in the ministry’s favor and Cementownia was forced to pay $5.3 million to the ministry in legal expenses.

The plaintiff in the second case was the Europe Cement Investment and Trade Co., of which Çukurova Electricity and Kepez Electricity hold 10.24 percent and 11.61 percent of shares, respectively. The compensation sought was $3.8 billion and the case ended in favor of the ministry, which was awarded $3.9 million for legal fees.

Poland-based Cementownia did not stop here, however, and filed an arbitration case against the ministry again in the United Nations Commission on International Trade Law (UNCITRAL) arbitration board for $750 million. This case is ongoing. The Poland-based Polska Energetyka Holding, believed to be a front company for Cem Uzan’s other firms, also initiated a $4 billion case against the ministry in the arbitration board. It is uncertain what conclusion these two firms will obtain. With these claims, the total compensation sought from the ministry has reached a staggering $16.5 billion, with an additional $1.8 billion in arbitration cases from eight other cases.

Minister of Energy Taner Yıldız stated that there are eight arbitration cases totaling $1.8 billion, and that $288 million of this will be paid, with roughly $1.6 billion in cases denied by the Turkish arbitration board. The minister, who spoke at the 2010 budget planning meetings in Parliament, however, only mentioned $1.8 billion in cases, and was reluctant to mention the total amount of the claims, which had reached $16.5 billion. The total claims represent the biggest compensation claim on any of Turkey’s ministries, and is five times the size of the 2010 budget of the Energy Ministry.

Out of the $38.5 billion in compensation claims against Turkey by organizations related to Uzan, the largest is a $19 billion claim for compensation at the ICSID by the Jordanian-origin Dutch investor Saba Fakes. The case is regarding Telsim, a telecommunications firm -- Turkey’s second-largest mobile telephone network at the time -- whose assets were seized by the Savings Deposit Insurance Fund (TMSF) in 2003. Fakes claims to own the largest portion of the company’s shares. Uzan is known to also be behind this case. Telsim, after being seized by the government, was sold and is now operating under the mobile operator Vodafone.

The Uzan family attracted media attention in 2004 when the government seized more than 200 of their companies in what authorities described as an attempt to collect on debts totaling billions of euros. The seized companies include the Star Media Group, cement factories and Telsim. The government said the move was necessary to stop the Uzans from siphoning off company assets. The Uzans have also been locked in a legal battle with United States telecommunications equipment maker Motorola and Finland’s Nokia over nearly $3 billion in loans to Telsim.

Uzan is waiting on a French court’s decision on whether or not to grant him asylum status. Paris says it won’t extradite Uzan pending his request for political asylum despite the “red alert” posted by Interpol to arrest and extradite Uzan to Turkey.