Exclusive: NY regulator probes European banks over Turkish family

By Karen Freifeld

NEW YORK (Reuters) - New York's state banking regulator has ordered local branches of half a dozen European banks to turn over details of their transactions with a Jordanian bank, along with documents related to Turkey's Uzan family, the subject of a series of legal actions over their business dealings.

A person familiar with the situation said the order is part of an investigation by the state Department of Financial Services into whether the European banks are improperly doing business with the Uzans, once one of the richest families in Turkey.

It was the latest move by New York banking Superintendent Benjamin Lawsky to clamp down on questionable practices by foreign banks in New York. Last year, he reached a $340 million settlement with London-based Standard Chartered Plc (STAN.L) over transactions with Iran.

The six banks covered by the order are BNP Paribas SA (BNP.PA), Commerzbank AG (CBK.DE), Credit Agricole SA (ACA.PA), Deutsche Bank AG (DBK.DE), Societe Generale (GLE.PA), and Standard Chartered.

A spokeswoman for Standard Chartered said it was cooperating with the order, while representatives of the other European banks either declined to comment or did not respond to requests for comment.

The two-page order demanded details of any transactions the banks have had with Amman-based Jordan Dubai Islamic Bank (AMM:JDIB).

It also told the six banks to hand over copies of any documents they may have been asked to produce in a long-running court battle between Motorola Credit Corp and the Uzan family.

In that case, a federal judge in New York has found that the Uzans siphoned off some $2 billion in loans that Motorola Credit made more than a decade ago to Turkish mobile phone company Telsim, which the Uzans controlled at the time.

The judge, U.S. District Judge Jed Rakoff, said last month that the Uzans have hidden their assets to prevent Motorola Credit from collecting some $3 billion in damages, and that he had determined that Jordan Dubai Islamic Bank is a proxy for the Uzan family.

The Jordanian bank did not respond to an email and a call for comment.

Cem Uzan, a member of the family who is named as a defendant in the Motorola Credit case, told Reuters the court did not allow the defendants to make a defense and said the defendants did not accept the jurisdiction of the court. Rakoff has said Cem Uzan is a fugitive from his court.

"How can I or any person accept to settle an amount which has no legal basis and foundation, that was decided without trial?" Cem Uzan wrote in an email from France.

Howard Stahl, a lawyer at Fried, Frank, Harris, Shriver & Jacobson in Washington who represents Motorola Credit, said the Uzan family and others currently owe the company more than $2.6 billion.

"Motorola will take whatever steps it reasonably can to collect that judgment," Stahl said in an interview.

Motorola Credit Corp, the former Motorola Inc's financing arm, became a subsidiary of Motorola Solutions Inc (MSI), after the communications company split in 2011. Vodafone Group Plc (VOD.L) bought Telsim in 2005.

The case is Motorola et al v. Uzan et al, U.S. District Court, Southern District of New York, No. 02-cv-00666.

(Reporting by Karen Freifeld; Editing by Eddie Evans and Frank McGurty)