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Erdogan Weighs in On Bank Scam Involving Turkish Stars

Legendary Turkish coach Fatih Terim led Galatasaray to UEFA Cup glory in 2000 - AFP
Legendary Turkish coach Fatih Terim led Galatasaray to UEFA Cup glory in 2000 - AFP
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Erdogan Weighs in On Bank Scam Involving Turkish Stars

Legendary Turkish coach Fatih Terim led Galatasaray to UEFA Cup glory in 2000 - AFP
Legendary Turkish coach Fatih Terim led Galatasaray to UEFA Cup glory in 2000 - AFP

President Recep Tayyip Erdogan on Saturday urged Turks to steer clear of pyramid schemes as a scandal raged at a top bank that allegedly defrauded celebrities and football stars of millions of dollars.

Turkish media has been filled with headlines for days about the troubles at privately-owned Denizbank.

Court documents reported by Turkish media show that one of the bank's Istanbul branch managers orchestrated a $44-million scheme that promised 250-percent returns for those willing to hand over piles of cash, AFP reported.

The failed fund bore the name of Türkiye's legendary football coach Fatih Terim and allegedly defrauded stars such as former Barcelona midfielders Arda Turan.

Terim gained hero status by leading Istanbul's Galatasaray to the UEFA Cup title in 2000.

He has not said anything in public about the scandal.

The Istanbul branch bank manager who created the fund, and reportedly received bags full of dollars from celebrities and players, said that Denizbank managers knew about the scheme.

Denizbank has denied the claim and said it has launched an internal audit to investigate the fund's collapse.

Erdogan said Saturday that "investigations into the suspects mentioned in this case continue".

"Türkiye is a state of law and whoever commits unlawful acts will be punished," Erdogan said in comments released by his office.

"Our citizens should not fall into the traps of fraudsters who offer high profits in a short time with the promise of easy money," he said.

Istanbul prosecutors are seeking more than 200 years in prison for Denizbank branch manager Secil Erzan for allegedly organizing the scam.

Erzan reportedly launched the fund last year to help drum up cash to cover up past investment losses.

Denizbank said in a statement that it "first became aware of the issue when a complainant, who is also our customer, came to the branch" in April.

The bank added that "the amounts in question are not significant in terms of the size for the bank's" total assets.

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Business

Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.