The Turkish government appears to have devised a solution to a controversy over the Turk Telecom board, which could enable the International Monetary Fund (IMF) to review Turkey's next credit tranche this week, according to the Turkish Daily News.
However, the paper noted that there were still doubts about whether markets could regain confidence ahead of a critical debt auction on Tuesday.
The recently appointed Turk Telecom board convened Monday to set a date for a shareholders' meeting at which the board would be rearranged, implying the government has backed off from its pro-board stance that caused a suspension of IMF loans.
A transport ministry official interviewed by Reuters said the shareholders' meeting would be held Tuesday. Deputy Prime Minister Mesut Yilmaz said the government was rushing the arrangement so that the IMF board could convene by Wednesday to approve a $1.56 billion loan tranche. It wasn't clear, however, whether the new solution would satisfy the fund, said the daily.
The IMF delayed the loan last week, pointing to its doubts about the Turk Telecom board and insufficient progress in the handling of banks controlled by the Savings Deposit Insurance Fund (TMSF).
Reports cited by the daily have suggested that the government would appoint two new members to the Telecom board with relevant private sector experience.
Furthermore, the current head of the board, who is also the general manager of the company, will leave one of his posts.
The IMF urged that the board include professionals able to lay out a concrete corporate plan, including layoffs, and lead the company until privatization.
But the government, mainly due to pressure from the Nationalist Movement Party which controls the telecom monopoly, opted largely for political appointees.
IMF spokeswoman Conny Lotze said on Sunday that the IMF hoped to resolve the dispute with Turkey "as soon as possible," said the paper – Albawaba.com
© 2001 Al Bawaba (www.albawaba.com)
