Turkey’s securities regulator on Friday sought the prosecution of 37 people, among them a former ruling party lawmaker and a former central bank deputy governor, over suspected stock market manipulation in the country’s investment fund scandal.
The Capital Markets Board (SPK) announced criminal referrals concerning 22 people over trading in mining company Vişne Madencilik and 15 over transactions in energy and construction group Işıklar Enerji ve Yapı Holding.
Those named were Emre Tezmen, chairman of Tera Yatırım Holding; Ertan Aydın, a former lawmaker from President Recep Tayyip Erdoğan’s ruling Justice and Development Party (AKP); and Erkan Kilimci, a former deputy governor of Turkey’s central bank.
The crisis erupted in mid-September when some investment funds, which pool investors’ money to buy shares and other assets, could not meet withdrawal requests amid investigations into suspected market manipulation.
The SPK ordered the liquidation of 131 funds managed by seven companies on September 17, requiring their assets to be sold to repay investors.
Those funds had 455,758 individual investors, some of whom have since received payments.
Friday’s bulletin imposed two-year trading bans on the 37 people and revoked the capital markets licenses of 21 of them for the duration of the bans.
Brokerage Tera Yatırım and fund manager Tera Portföy were barred for two years from trading Vişne shares for their own accounts, while brokerage Alnus Yatırım received the same restriction for Işıklar shares.
The regulator also authorized liquidation procedures to begin for funds managed by Hedef Portföy, which were already covered by the September 17 order, under the rules applied to funds run by A1 Capital Portföy, Bulls Portföy and Pardus Portföy.
The decisions came as Erdoğan declared the crisis under control on Friday, identifying investor repayments, prosecution of those responsible and protection of capital markets as the government’s priorities.
A bill governing the liquidation and recovery of fund assets cleared parliament’s Planning and Budget Committee on Wednesday and is expected to reach the full legislature next week.
It would permit interim payments of up to 1 million Turkish lira, about $20,000, per eligible investor, calculated from contributions after withdrawals are deducted.
Payments would depend on available cash, with the regulator able to prioritize investors with the smallest net contributions, and would come from fund assets and recovered money without Treasury funding.
The investigation has reached government figures, with former deputy agriculture and forestry minister Mustafa Aksu jailed pending trial on Monday and former family minister Fatma Betül Sayan Kaya questioned over investments by her and her husband, including allegations both deny.
The AKP and its ally, the Nationalist Movement Party (MHP), on Tuesday again rejected opposition demands for a parliamentary inquiry into political connections and regulatory failures behind the scandal.
Coverage of those connections has also brought penalties against broadcasters, with the Radio and Television Supreme Council (RTÜK) on Friday fining Sözcü TV and Koza TV over broadcasts questioning government figures’ links to the scandal.
Concerns about coordinated share trading have meanwhile prompted MSCI, a US-based provider of stock indexes followed by international investment funds, to restrict changes to its Turkish indexes and warn of a possible downgrade from emerging-market status if market transparency and oversight do not improve by June 2027.
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