Kepez Elektrik TA.S.

concluded

In August 1987, the Turkish government, through its Public Participation Administration (KOI), partially divested its shares in state owned electricity supplier Kepez Elektrik TA. S. At the time of the divestiture Kepez owned three hydro plants with a total installed capacity of 261-MW. From 1987 to 1993 KOI continued to sell Kepez shares on the Istanbul stock exchange. By early 1993 about 43.68% of CEAS shares were privately owned and traded on the Istanbul stock market. In February 1993, a local company Rumeli Holding, based in Istanbul and wholly owned by the Uzan family, acquired a 25.4% stake in Kepez from KOI for a reported $33 million. In the summer of 2003 Turkey’s independent energy market regulator (EPDK) seized Kepez, in effect transferring it back to the Turkish state. The official reasons offered by the Turkish ministry of Energy for the seizure were “constant violations of regulatory and contractual obligations". More specifically, the Uzan family was accused of breaking electricity market legislation passed in September 2002 by owning both electricity producer CEAS and distribution company Kepez Elektrik. The legislation was backed by the IMF and aimed to liberalize the power industry. The Uzan family was required to comply with the legislation by transferring transmission rights from Kepez Elektrik to the state Electricity Transmission Company (TEIAS) by February 2003. The Uzan family refused to comply, leading to the seizure of both companies. Following the seizure of Kepez by the EPDK the company had its operating license suspended in June 2003 and was de-listed from the Istanbul stock market the same month. In September 2011, the ICSID ruled in favor of Turkey in the dispute against the Uzan family, which started in 2004. http://www.worldbulletin.net/?aType=haberYazdir&ArticleID=78369&tip=