What Is Happening at Maltepe University?

The record

How far can a financial crisis at a foundation university in Türkiye go? Istanbul Şehir University provided an answer in 2020: salaries went unpaid, the Council of Higher Education (YÖK) transferred management to a public university, and six months later the institution closed. The law that enabled that path was rewritten in August 2026. The question Maltepe University’s founder Hüseyin Şimşek needs to answer is simple: how far is Maltepe from that threshold?

The precedent: Istanbul Şehir University

ISTANBUL — On 19 December 2019, YÖK temporarily suspended Istanbul Şehir University’s operating licence and transferred its management to its guarantor institution, Marmara University. The picture YÖK later disclosed was severe. Revenue did not cover expenditure. October and November salaries had not been paid, student scholarships had been disrupted, and electricity, water and gas bills had reached enforcement proceedings. Banks had begun legal action over unpaid loans, and Halkbank had secured restrictions on university assets over a loan of approximately $70 million.

On 30 June 2020, a presidential decision revoked the university’s operating licence and transferred its students to Marmara University. Its founder Ahmet Davutoğlu argued that the decision was political. The stated reason, however, was financial: the university could not continue teaching with its “existing assets”.

The law was annulled, then rewritten

In February 2024, the Constitutional Court annulled the provisions underpinning Şehir University’s closure. Its reasoning concerned legislation allowing the most severe intervention without first trying lighter measures, and the closure by administrative decision of a university established by law.

The gap was filled in August 2026 by Law No. 7592. The new system is graduated: a warning, a ban on new programmes, suspension of student admissions, suspension of the operating licence for up to three years, and revocation of the licence. The financial threshold is now explicitly stated. If a foundation university cannot pay its debts falling due and its short-term liabilities from annual education revenue or assets outside its educational operations, its operating licence may be temporarily suspended. Management then passes from the founding foundation to the guarantor or a public university designated by YÖK. Those who deliberately cause this outcome cannot serve again on university bodies.

This is the legal counterpart of the scenario publicly described as a “trustee” appointment: management being taken from the founder and transferred to the state.

Maltepe’s structure

Foundation universities in Türkiye are nonprofit institutions; their revenue cannot be transferred to their founders. Maltepe University belongs to the Istanbul Marmara Education Foundation (İMEV), established in 1996. The foundation brings Marmara Education Institutions “from kindergarten to university”, the university itself, and its teaching and research hospital under one roof. It is headed by Hüseyin Şimşek, who founded the university in 1997.

In such a structure, money flows between the school, hospital and foundation are not visible from outside. Documents examined by The Ledgers raise questions about the allocation of expenses between these institutions and affiliated businesses. They pose questions only the foundation can answer.

The same lesson abroad

The closest structural example comes from the United States. For more than 14 years, University of Louisville president James Ramsey simultaneously led the university and the university foundation managing its $800 million endowment. In December 2016, Kentucky’s state auditor found that Ramsey had transferred $67 million in university money to the foundation without board approval and that the two institutions’ accounts had become entangled. An independent forensic audit in June 2017 found that the foundation had drawn $42 million from the endowment for off-budget spending and secretly operated a $21 million supplementary compensation plan. The university’s new board chair described the picture as “disturbing”.

The problem was not only the missing money. In 2016, the accreditation body placed the university on probation over governance and financial stability, and its credit ratings fell. In April 2018, the university and foundation sued Ramsey and former executives, alleging that they had diverted foundation funds into speculative and unauthorised ventures and paid excessive compensation.

In South Korea, Seonam University founder Lee Hong-ha received a nine-year prison sentence in 2013 for embezzling 90.9 billion won, approximately $79 million, from the schools he had established; the court said he had treated universities as “personal property”. In Japan, the Nihon University investigation began in 2021 with inflated equipment leases at its hospital and culminated in the 2022 tax-evasion conviction of long-serving chairman Hidetoshi Tanaka. In Hungary, a system placing universities under foundations close to the government led to 21 universities being cut off from EU funding in December 2022.

None of these examples concerns Maltepe. Their common lesson is nevertheless clear: the problem starts in governance before it starts in money. If those running an institution also determine who oversees it, accountability eventually comes from outside.

The books open in 2027

Under Law No. 7577, foundation university hospitals lose their corporate tax exemption and VAT exemption from 1 January 2027. Hospital accounts will become subject to direct examination by the tax administration. The new tax burden intersects with the new law’s financial threshold in the same year.

What Şimşek needs to answer

There is no publicly available YÖK sanction decision against Maltepe University. But the new law’s threshold is clear, and only the foundation knows how far it is from that threshold. The Ledgers asked Hüseyin Şimşek and İMEV: what proportion of annual education revenue do the university’s short-term liabilities represent? Are independently audited financial statements made public? Who approves the allocation of expenses between the university, foundation, schools and affiliated companies?

At Şehir University, it was the banks and YÖK that asked these questions. Maltepe’s founder has an easier path: answer them before someone else asks.

Based on reporting from: Medyascope · Şehir University licence suspension, 19 December 2019; Cumhuriyet · YÖK explanation on Şehir University; Duvar English · Şehir closure, 30 June 2020; Serbestiyet · Constitutional Court ruling, February 2024; Legalbank · Law No. 7592, August 2026; Louisville Public Media · State audit, 14 December 2016; Louisville Public Media · Forensic audit, 8 June 2017; The Bond Buyer · Ratings and accreditation, December 2017; Louisville Public Media · Lawsuit against Ramsey, 25 April 2018; Korea JoongAng Daily · Seonam founder sentenced, June 2013; Jiji Press · Nihon University hospital arrests, 2021; Japan Today · Tanaka conviction, 2022; Science|Business · Hungarian universities and EU funding, December 2022; İMEV · Foundation information; Dünya · Law No. 7577 and university hospitals, July 2026.