By Daren Butler and Ayla Jean Yackley

ISTANBUL (Reuters) - Turkish President Tayyip Erdogan vowed on Thursday to choke off businesses linked to the U.S.-based cleric he blames for an attempted coup, describing his schools, firms and charities as "nests of terrorism" and promising no mercy in rooting them out.

Business is the arena in which the network of the cleric, Fethullah Gulen, is still the strongest, Erdogan said in a speech from his palace broadcast live. Those who "financed the shooters" would be treated like the coup plotters themselves, he said.

Erdogan accuses Gulen of harnessing an extensive network of schools, charities and businesses, built up in Turkey and abroad over decades, to infiltrate state institutions and build a "parallel structure" that aimed to take over the country.

An Istanbul court on Thursday issued an arrest warrant for the cleric for allegedly "giving the instructions" for the coup attempt, the latest of several warrants issued against him in recent years on charges including running a criminal network.

The 75-year-old cleric denies the allegations, and he denounced the arrest warrant.

"It is well documented that the Turkish court system is without judicial independence, so this warrant is yet another example of President Erdogan's drive for authoritarianism and away from democracy," Gulen said in a statement.

More than 60,000 people in the military, judiciary, civil service and education have been detained, suspended or placed under investigation for alleged links to Gulen's "Hizmet" (Service) movement since the July 15 coup, prompting fears among Western allies and rights groups of a witch hunt.

"They have nothing to do with a religious community, they are a fully-fledged terrorist organization. ... This cancer is different, this virus has spread everywhere," Erdogan told heads of chambers of commerce and bourses attending his speech.

"The business world is where they are the strongest. We will cut off all business links, all revenues of Gulen-linked business. We are not going to show anyone any mercy," he said, describing the detentions so far as just the tip of the iceberg.


Gulen, who has lived in self-imposed exile in Pennsylvania since 1999, has denied plotting against the state and has condemned the coup attempt, in which rogue soldiers commandeered war planes, helicopters and tanks, bombing parliament and seizing bridges in a bid to seize power.

More than 230 people were killed, excluding soldiers who were involved in the coup attempt. Many of the dead were civilians.

Before the failed coup, the Turkish authorities had already seized Islamic lender Bank Asya, taken over or closed several media companies and detained businessmen on allegations of funding the cleric's movement.

Although the bulk of the purges in the wake of the putsch have been in the security forces, judiciary and public sector, private firms have also been affected.

The head of research at a brokerage had his license revoked over a report to investors analyzing the coup plot, while Turkish Airlines, arguably the country's most recognized brand, has fired 211 staff over alleged Hizmet links.

The chairman and several executives from Boydak Holding, a prominent family-run conglomerate with interests from furniture to energy, have also been detained, as has the chief of Turkey's biggest petrochemicals firm Petkim.


The coup fallout risks affecting some multinational firms operating in Turkey, including delaying investment decisions.

German energy group EWE, which employs around 700 people in Turkey, said around a dozen managers had left its subsidiary in recent days. A spokesman declined to give a reason but said the company, while not questioning its engagement with Turkey, was monitoring the political and economic situation very carefully.

The chief executive of Siemens , Joe Kaeser, told reporters on Thursday he had summoned the head of the group’s Turkish operations to a supervisory board meeting a day earlier to get a first-hand account of events inside the country.

The German industrial group employs 3,000 people in Turkey.

"It's a question of keeping a cool head and keeping an eye on how things develop, because things are developing which are not really desirable in a modern democracy," Kaeser told a conference call to discuss the company's earnings.

Prime Minister Binali Yildirim said Turkey would introduce a package of reforms to encourage investment including removing some taxes, as the government looks to shore up confidence. But investors remain cautious.

"Investment plans are being put on ice. Given the current emergency legislation new investment is not advisable," said Anton Boerner, head of Germany's BGA trade association, adding concern about Turkey's credit ratings had also made investment more expensive.

Germany is the biggest foreign investor in Turkey with investments totaling more than 12 billion euros ($13.3 billion) since 1980, according to the German foreign ministry.


The coup and its aftermath have strained Turkey's relations with the United States, which has said it will not extradite Gulen unless Turkey provides evidence of his wrongdoing, and Europe, some of whose politicians have raised concern that Erdogan is using events to further tighten his grip on power.

The United States is evaluating new documents sent by Turkey to push for Gulen's extradition, a State Department spokesman said on Thursday.

Turkey's EU affairs minister criticized comments by Austrian Chancellor Christian Kern suggesting talks on Turkey joining the European Union should be broken off, saying the EU's founding values remain a reference for Ankara.

Kern said on Wednesday he would start a discussion among European heads of government to quit talks on Turkish accession because of its democratic and economic deficits.

"It's disturbing that his statements are similar to those of the far right. ... Criticism is surely a democratic right but there has to be a difference between criticizing Turkey and being against Turkey," EU minister Omer Celik told reporters.

A senior EU official involved in accession talks with Turkey said Kern's comments were "too early" and part of "the domestic debate" in Austria, where the far-right Freedom Party attracts around a third of votes in opinion polls. But he did not entirely dismiss them.

"The EU should not, obviously, pursue the road of ending the accession talks with Turkey, but we will have to if Turkey keeps sliding into semi-authoritarianism," the official said.

European Commission President Jean-Claude Juncker said in remarks published on Thursday that it would be counterproductive to freeze accession talks, but said Turkey is currently unfit to become an EU member.

The purges of Gulen's suspected followers this week extended to the Scientific and Technological Research Council of Turkey (Tubitak) and have also included private and military hospitals, which are now under the supervision of the health ministry.

The number of staff purged at Turkey's Football Federation rose to more than 110 on Thursday, while four actors and two directors at municipal theaters in Istanbul were also suspended, according to broadcaster NTV.

(Additional reporting by Tuvan Gumrukcu in Istanbul, Shadia Nasralla in Vienna, Francesco Guarascio in Brussels, Georgina Prodhan and Caroline Copley in Frankfurt, Joseph Nasr in Berlin, and Eric Beech in Washington; Writing by Nick Tattersall; Editing by Peter Graff and Leslie Adler)