President Recep Tayyip Erdoğan said Friday that Türkiye is addressing the fund turmoil in line with its priorities, warning that those who multiplied small sums through market tricks would be made to pay.
Erdoğan said Türkiye was confronting a problem that had resurfaced in a certain part of the fund market, and that the government had brought it under control through decisive steps taken since Sept. 17.
The crisis erupted after several funds last month said they could not meet investors' redemption requests during a market sell-off, prompting a wide investigation into suspected price manipulation in a number of thinly traded stocks.
The Capital Markets Board (SPK) suspended trading in 131 funds run by seven asset management companies and placed them into liquidation, affecting nearly half a million investors. The government said it aimed to complete the liquidation of half of the funds by the end of this week.
Prosecutors have issued asset freezes and travel bans and have arrested more than 80 people, including the top executives of the asset management companies.
Erdoğan said the government had quickly set up a Fund Coordination Board to oversee the liquidation.
"We are carrying out the operation with the care of a surgeon," he told an event in Istanbul.
Repaying investors
Erdoğan said the authorities were handling the issue according to three priorities.
The first priority, he said, is for the savings in the funds being liquidated to be paid to their owners as quickly as possible. He said payments under ordinary liquidation began last week and have continued without problems.
For extraordinary liquidations, interim payments will begin once the bill submitted to Parliament becomes law, he said.
Manipulators to be held to account
The second priority, Erdoğan said, is to deal in court with those who made unjust gains through manipulation. He said this is being carried out with the judicial process in mind, and that investigations are deepening in light of new information and confessions.
He contrasted those people with ordinary workers and business owners. "My exporter brother travels country to country to sell one more container, my industrialist brother works with great devotion despite the ring of fire around us, my merchant and tradesman brothers go to extraordinary lengths to earn honestly," he said.
Against that background, he said, he would show no tolerance for people who multiplied TL 3 into TL 10, TL 20 or TL 30 in just three to five months through market trickery, and that they would be made to pay for their excessive gains.
Protect markets
The third priority is to manage the process without damaging the capital markets, Erdoğan said. He said the government had been careful from the first day, drawing a clear line between opportunists and investors.
He said the opposition and what he called "hired-gun" press outlets had not shown the same care.
Warning against 'criminalizing' markets
Erdoğan said ignoring the problem in part of the fund market would be wrong, but so would using it as cover to attack Turkish capital markets and scare investors away. "We cannot welcome the criminalization of our entire capital markets over the fund issue," he said.
He said such an approach would hurt not only the capital markets but also the real sector, because capital markets act as a financial bridge between savers and businesses.
Erdoğan said the problem had arisen in only 4.6% of the total number of funds. Turning that into an attack on all capital market instruments, he said, "would amount to undermining the Turkish economy and sabotaging our country's path to development."
"No one – whether a politician or a journalist – has the right to do this. And we will not tolerate such opportunism."